It's not often we get a 500 pip range in a major currency pair but today's price action in USD/JPY certainly delivered. It was a holiday in Japan and someone used that to drive the pair to 160.00 for a moment only to have the MOF intervene and bust the pair down to 154.54.
We're now nearly 200 pips off the bottom and I think that's instructive. The fundamentals haven't changed but what has changed is that the price is now lower and the MOF has showed its hand. Yes, they might intervene at 160.00 again but the pair is trading well-below that and they're not likely to intervene again before 160.00.
So look for USD/JPY buyers to continue to tip-toe in.
I spoke with BNNBloomberg on Friday about the outlook for the yen.
