Comments on wariness over Bank of Japan intervention via Mizuho:
- It would be unwise to project the BoJ’s restraint on premature tightening as a green light for aggressively shorting the JPY. Intervention risks are clear and present
- the MoF is intent on keeping speculators at bay. Which means that the temptation to lift USD/JPY above 149 to test 150 will have to answer to the sharp end of the MoF’s interventions. And speculators will be well-advised to be wary.
- despite higher UST yields (that pressures JPY), “risk off” sentiments could squeeze JPY funded carry and boost JPY from haven demand. And if the MoF leverages on this , short JPY speculators could hurt a lot more.
Bank of Japan Governor Ueda and Finance Minister Suzuki are trying to stand inn the way of a still weaker yen