USD/JPY is now down 502 pips on the day to 131.86, which is the lowest since August.
The August low was 130.39 and that's the main support line on the chart.
The latest leg is getting help from a bid in US Treasuries. US 10-year yields have fallen to 3.66% from a high of 3.71% in the post-BOJ aftermath.
Murmurs out of Japan in the next few weeks will be extremely important and I would suspect a steady stream of rumors as well. There is still a considerable speculative short in JPY and I think today's actions send a clear signal that fighting Japan is a tough fight.
That begs the question of where Japan is comfortable with yen prices. Allowing it to rise will undo some of the recent imported inflation and offer some relief to corporate Japan.I can see the argument for letting it run all the way to 115.00 and that will get some further help if the market is right about a premature shift to neutral from the Fed.
