The MoF has actioned intervention in the FX market this morning for the first time since 1998 in support of the Japanese yen. Nevertheless, economists at Rabobank continue to target USD/JPY 147.00 on a three-month view.

Divergence between Fed and BoJ policy continues to signal upside potential

“According to Vice Minister of Finance for International Affairs Kanda, the intervention was triggered by the sudden and one-sided nature of the moves in the JPY.”

“Earlier this morning the BoJ reiterated its commitment to its ultra-loose monetary policy settings. This was just hours after the Fed outlined its very hawkish policy outlook. As a consequence, it is unlikely that the MoF expects the intervention to turn USD/JPY lower. Instead, today’s action is likely aimed at slowing down the pace of gains in USD/JPY.”

“In view of our bullish USD view, we retain a three-month target of USD/JPY 147.00.”