Keep an eye on USD/JPY as we approach the next critical level where we could see a trigger for intervention by Japanese authorities. The pair is trading at the highs around 149.90 levels at the moment and we are but a whisker away from clipping 150.00.
Verbal intervention and jawboning haven't done the trick and why would it when actual currency intervention in itself has also been quickly pushed back by markets over the past few weeks.
One can argue that there might be a suggestion that the MOF could pursue a stronger bout of intervention at this level, in order to try and limit the market's appetite. Considering the fact that if they don't, expect all hell to break loose for the yen - especially with bond yields continuing to climb. In turn, that will very well translate to another tailwind for the dollar.
On a side note, there are large expiries today for USD/JPY at 145.00 ($3.5 billion) and 147.90-00 ($3.7 billion) but I don't see that as coming into play unless Japan hammers down the pair by intervening.
