Yentervention

Clear thoughts on USD/JPY and JGBs.

In late November, we shifted from a bullish USD/JPY stance to a more neutral one. Although we didn’t have any related trades in the portfolio to reflect this shift, we noted at the end that “should we see a further move to the 157-160 region in a short period of time, then the intervention threat becomes real.”

Thanks to the growing likelihood of PM Takaichi calling a snap election, we’ve seen USD/JPY trade above 159.00 today, less than two months after our last note.

Therefore, intervention risk is indeed becoming real, but the broader dynamics beyond a short-term knee-jerk need to be factored in before making any trading decisions.