USDJPY monthly

There was a good battle at 140.00 but the bulls finally broke through and the pair is up to 140.12 at the high. You have to go back nearly 24 years to get to these levels and in 1998, the pair didn't stay there for long.

So far though, this hasn't lasted long either as a quick round of profit taking has dropped the pair back to 139.81. No doubt the break of 140.00 triggered some profit taking from long-term bulls who have ridden an absolutely magical trade this year.

US rates are much lower than back in 1998 but the Bank of Japan has yield curve control now and that's crushing the long-held role of the yen as the safe haven of choice. Instead, that money is flowing into US dollars, where you can now earn 3.51% in a two-year Treasury.

I just can't believe that inflation in Japan is as low as reported. The combination of high global prices of commodities and the extreme fall in the yen this year are a perfect inflationary storm and CPI is still sub-3%?

The momentum is still higher here for a test of the 1998 high but there's a big risk of the BOJ pulling the rug.