USD/JPY flows: BoJ Back in the office

While the soft rhetoric from BoJ and Japanese officials likely pointed towards little will in intervention, in our article we have forecasted if USD/JPY rises by 1% a day continuously, it will attracts more attention towards intervention. It proves that the rally is too rapid in MoF and BoJ's eyes as we are seeing an intervention style meltdown in USD/JPY. In the past, most intervention ended by driving the pair down by roughly five big figures from peak to trough and will likely only be able to stall the previous underlying momentum until a fundamental shift. But who knows when someone gets called to work on a holiday, maybe they will be more forceful than usual as unpredictability is also a key element in the toolbox of intervention.

USD/JPY slumped from session high at 160.20 to 155.28, down 1.88% for the session so far.