One of the many fronts against a strong yen has been the hope that Japanese companies would use the strong yen to buy foreign companies.

Policymakers have rolled out programs to help finance acquisitions but the take-up has been minimal until today. The rumored $12.8B price tag is large but it’s not a tremendous flow in USD/JPY. For comparison, the CNOOC takeover of Nexen is $15B in the much smaller CAD market (not CAD/JPY specifically but all CAD crosses will be affected).

The reason the market is moving is that this could be a sign of things to come. Japanese companies have been tight with their money and risk averse.

The downside (for USD/JPY) is that the MOF may be less likely to intervene so as not to front run their own companies.