The USD has surged higher in the wake of the above-expected US CPI report on Tuesday:
USD/JPY approached 145 earlier in the session but, so far, statements out of Japan's Ministry of Finance have put a top on it:
Adding to his remarks:
- We’re concerned that the recent foreign exchange moves are very sudden
- We’ll monitor the situation with a sense of urgency, and respond appropriately without ruling out any options
I've posted before on the unlikelihood of direct FX intervention and, even if there is, without police change from the BOJ the intervention could backfire or be a short-term fix at best. I've linked relevant posts below.
Comments out of traders in Japan echo this. For example, Norinchukin:
- Speculation will continue and volatility will remain high until the Fed meeting next week
- While the BOJ will continue to send warning signals on the yen’s rapid weakness at its meeting, it is very unlikely it will change policy in response to the yen’s weakness
----
Earlier posts for background and more info.
----
USD/JPY topped out ahead of 145 last week, peaking ahead of barrier options the level and getting driven down later in the week by comments from the MoF and Bank of Japan Governor Kuroda himself.
USD/JPY chart update:
