USD/JPY registered impressive gains on Friday before going into a consolidation phase below 135.00 early Monday. Economists at ING expect the pair to continue marching forward to the 136-138 area.

FX intervention risk remains elevated

“We have long discussed how FX intervention is not a straightforward policy move for G7 countries, but it’s hard to argue that this remains the only option on the table for Japanese authorities unless Treasury yields start to drop.”

“Risks for USD/JPY remain tilted to the 136-138 area (and potentially even beyond) over the coming days.”