With every round of intervention, the effectiveness becomes lesser - at least in terms of trying to convince markets that they can turn the ship around. It's looking like a futile attempt as the tide continues to dictate that the path of least resistance is for a move higher in USD/JPY.
Sure, bond yields are on the retreat to start the new week but unless we see a change to the fundamental picture, the MOF and BOJ are going up against the odds here considering that we still have monetary policy divergence to deal with for the most part. Adding to that, broader markets are becoming increasingly open to the idea of the Fed moving towards 5%. Meanwhile, the BOJ is still seen sitting on its hands despite the change in the times.
Japan authorities are trying to draw a hard line to limit USD/JPY below 150.00 for now but unless we get closer to a BOJ pivot of sorts, it's hard to imagine the bulls not buying up any intervention dips on the pair - so long as 145.00 holds in my view. Sure, it makes for some risky plays and it's a highly volatile environment at the moment. But the pressure isn't so much on markets to crack rather than on the MOF to burn through its reserves, although plentiful, to try and defend the yen.
However, without a change to the fundamental narrative, it's a tall order to try and convince markets to turn the other cheek.
