USD/JPY Flows - sources reports keep heavy

Reuters sources reports keeping USD/JPY heavy after further whippy pressure again this morning. 

It quotes sources familiar with the matter as suggesting that "the U.S. Treasury has informed a number of banks that it may intervene in the yen market on Friday and that they should stand ready for future action". 

That is perhaps a little ambiguous on whether that would represent coordinated action, action on behalf of Japan, or just communicated knowledge of the risk of more US hours action. But in any case, it keeps the market vigilant that further intervention is high risk and that the US is in the loop and at least tacitly or explicitly supportive. Bessent yesterday looked to give some blessing to the action noting that the yen was undervalued and excess volatility undesirable. 

Thursday's lows and the 200dma remain the big key area from yesterday and will determine if action is really gaining more traction. In any case, price action looks set to remain more volatile with wider bars and potential further downside tests into next week.