It’s not often that we get a 500 pip range in a major currency pair, but today’s price action in USD/JPY has certainly paid off. It was a public holiday in Japan and someone took the opportunity to push the pair to 160.00 for a while, only to have the MOF intervene and drop the pair to 154.54.
We are now almost 200 pips from the bottom and I think that is informative. The fundamentals haven’t changed, but what has changed is that the price is now lower and the MOF has shown its hand. Yes, they could intervene again at 160.00, but the pair is trading well below that level and they are unlikely to intervene again before 160.00.
So look for USD/JPY buyers to continue tiptoeing in.
I spoke with BNNBloomberg on Friday about the outlook for the yen.
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