Japanese chief currency diplomat Kanda dropped all the warnings just before Tokyo went to bed but there was no intervention. It's now nearly 1 am in Tokyo and the market is sensing that it's safe for a least a few hours.
I imagine there's some element of short-covering here as those expecting a line in the sand at 160.00 bow out. That said, two months ago the MoF let the pair run one way from 158.00 to 160.20 before knocking the pair down 800 pips. They might be trying to pull in spec longs again before blowing them out.
I admire anyone willing to do this dance with Japan but it's a real game of chicken. Keep an eye out for the US 5-year auction at 1 pm ET. Yields are 6-7 bps higher across the curve at the moment and pressing. A soft/strong auction would have knock-ons for USD/JPY, though I wouldn't expect more than 20 pips under any circumstance.
