USD/JPY barely below 155, fundamental support for the rate differential – an intervention from the Ministry of Finance?

USD/JPY remained long regardless of the decline. It is still below 155 and the upcoming image is as follows:

• large options barriers at 155.00,
• big stop loss buyers are relying on this

Traders are wary of interventions around 155, this is the latest (in a long list) of “lines in the sand”.

Japan’s Ministry of Finance remains acutely aware that US-Japan rate differentials are a key fundamental factor and show no signs of changing in the near future.

This week, key events await you:

• Bank of Japan meeting (statement expected Friday)
• US data Thursday and Friday, GDP then PCE

The BoJ is unlikely to have much to say to stop the rise in USD/JPY, but US data could offer some respite (falling GDP and/or PCE inflation). A respite, but not a reversal.