The low just a moment earlier touched 152.19 and the pair is down well over 900 pips already from the highs since early July. The breakdown earlier in the week saw price fall below the 155.00 mark and also the 100-day moving average (red line). Now, that shifts the focus to key support from the 200-day moving average (blue line) next.
The key technical level is seen at 151.55 at the moment and will be a major support level to watch. That alongside the 50.0 Fib retracement level of the swing higher this year at 151.10. A break below those levels will then shift the focus towards the 150.00 mark.
Outside of safety flows and arguably a corrective downside move in the pair this week, there's no major catalyst for such strong bids in the Japanese yen.
The only other reason I can think of is that traders are hedging their bets ahead of the BOJ next week. There is a chance for the central bank to raise interest rates, so perhaps traders are heeding some caution on that.
However, as argued previously, I would still wager that we are setting up for a sell the fact trade in the yen regardless.
If the BOJ doesn't hike, that's another disappointment once again for those hoping for the central bank to take action. And even if they do, I anticipate it'll be more of a dovish hike once the dust settles. And after all, it will just be another measly 0.10% rate hike in any case.
The idea is that the BOJ has to be consistent in doing so. But given the circumstances, it'll likely be another rate hike followed by a long pause again.
