Japanese officials unanimously refused to confirm any FX intervention. Instead, they continued to emphasize their readiness to react to ‘excessive movements’.

In any case, Tuesday's exchange rate movement will reinforce the impression among market participants that the 150 in USD/JPY is a sound barrier that is difficult to break through.

Ultimately, however, interventions do little to change the fundamental situation. As long as the US economy continues to appear robust and the BoJ does not seek an exit from its ultra-expansive monetary policy, there are fundamental reasons for an upward trending USD/JPY. FX interventions will do little to change this. If the MOF nevertheless continues to intervene, an attrition battle could loom, with the currency market repeatedly testing the 150 mark and the MOF reacting accordingly. The next few days are likely to remain exciting.