Nervousness around weak yen grows. In the view of economists at ING, FX intervention will be insufficient to prevent a USD/JPY move to 130.

Expect traded USD/JPY volatility to remain bid

“It would not be a surprise to see USD/JPY consolidate near the highs as traders process the risks of FX intervention, yet we suspect that the trigger for Bank of Japan's (BoJ) own-account intervention would be a fast move closer to 130. Expect traded USD/JPY volatility to remain bid in this environment.”

“In the bigger picture, unless the BoJ is prepared to hike rates, FX intervention can only temporarily interrupt what should be a grind higher in USD/JPY this summer. 130 seems possible.”