USD/JPY: 112 still seems plausible - Westpac

Sean Callow, Research Analyst at Westpac, suggests that it is not clear that the flurry of official commentary in support of intervention on USD/JPY has been much of a factor in the wary stabilization of USD/JPY around 108 this week.

Key Quotes

“The threat of action just ahead (or during!) the G20 meeting Thu-Fri is surely not very high. Yet it may be that speculative accounts are sufficiently short USD/JPY for now, with global risk appetite showing signs of improvement. With USD risks broadly lower near term, it is hard to be too upbeat on USD/JPY but perhaps the worst selling has passed.

We suspect it will require public BoJ discussion of fresh policy steps at the April 27/28 meeting for USD/JPY to finally form a solid base for recovery over Q2. 112 still seems plausible on a 1 month view.”