As Jamie reported earlier, real money funds continue to show an appetite to buy USD/JPY and whilst they may not always pick the exact bottom, their presence is usually a sign that a turn might not be too far away.
After Noda’s comments yesterday on Korea possibly losing its G20 leadership role due to its FX intervention, I consider it unlikely that the MoF will be intervening to buy USD/JPY anytime soon. If they don’t, then 80.00 will probably be too big to ignore and as markets get thinner in the lead up to Christmas, a push down to record lows will probably ensue.
My conclusion is that a base is not yet in place and a test of 80.00 will happen in the coming weeks. If we break below there then the big option books may well have a lot of adjustments to do and that could send USD/JPY on an exhaustive sell-off towards 75.00. Then we start trying to pick the bottom.