- No comment on FX levels
- But FX stability is important
- Sharp FX moves are undesirable
- Watching FX moves closely
We've heard this all before and and it is no coincidence as USD/JPY trades to its highest in two decades above 126.00 currently. I still don't see this kind of verbal intervention as being anything more than a speed bump. A firm break above 126.00 sets up a potential jump towards 130.00 next for the pair so that's something to watch for. In the meantime, one can continue to expect continued jawboning from Japanese officials.
As for any kind of actual intervention, that remains unlikely for now as it would have to be a coordinated move with consent from the US camp I would say. It could happen if USD/JPY comes up too quickly but that might only be the case in the event of something rather disorderly in the market.
