JPY: Time for BoJ intervention? – ING

Research Team at ING, suggests that the bar for unilateral intervention remains high as far as JPY is concerned.

Key Quotes

“Chief Cabinet Secretary Suga’s comments that FX market moves are “one-sided” and “excessive” is a clear sign that officials are becoming increasingly nervous over JPY strength.

Yet, while the odds of FX intervention have slightly risen, we still remain some distance away from any material MoF/BoJ action. With PM Abe reluctant to go down the route of competitive devaluation ahead of the G7 summit in May, intervention looks unlikely unless USD/JPY sharply drops into the 100-105 area.

More aggressive jawboning will be the near-term option to maintain USD/JPY above 105, with the onus on the BoJ to ease further in April. Running through the options, we suspect there is little the central bank can do to alter the yen’s tide.”