Japanese finance officials did backflips this morning to try and rowback comments from Finance Minister Nakagawa that he is not considering forex intervention now, that the JPY rise is not too severe and that forex moves are not too sharp today. USD/JPY immediately slid to 88.23 requiring the MOF to trot the Minister back out too say that he would do what it takes to support the economy including dealing with rapid forex moves.

The back-track steadied the market in the short-term but the market thinks Nakagawa spoke the truth the first time around so if the USD remains weak, USD/JPY will be a victim as well as the European pairings.

USD/JPY trades now at 88.67, down from rebound highs of 88.87