USD/JPY is in the middle of the daily range after falling as low as 145.90 today and the bouncing 60 pips. It's been a back-and-forth market but has defied some early loud commentary that suggested buying the dip.
I spoke with Dale Pinkert on Thursday and warned that intervention was less of a risk than a shift from the Bank of Japan. We got a sense of that on the weekend with Ueda's comments and now that puts the central bank in play for the rest of the year with decisions on:
- Sept 22
- Oct 31
- Dec 19
Circle those dates.
Ultimately, I still think the path for USD/JPY is higher. The BOJ decision is 10 days away and Ueda's talk of a quiet exit doesn't suggest any big changes to monetary policy. US rates are still 500 basis points higher than Japan and that's an unceasing tailwind in a market that's already finding plenty of reasons to buy the US dollar.
As for intervention, I don't see a big risk until 155, though that's certainly an outlying view with many commentators highlighting 148-150 as a range to watch. The main reason is that the US dollar is independently strong and I think the MOF will recognize that, though certainly not without some strong words.