Japan's MoF aggressively intervened to support the yen. More interventions are in the offing ahead of Friday's Bank of Japan (BoJ) meeting, according to economists at TD Securities who believe that MoF would prefer USD/JPY below 150.

Intervention is unsustainable

“The timing of this intervention looks intended to maximize pain for 'speculators'. Indeed, it occurred in poor liquidity conditions and just as Fed officials appeared en masse with a well-timed article drop about downshifting the path of hikes. Together, that setup offers the most bang for the buck on the intervention front and may suggest more success at trying to contain USD/JPY topside, in the very short-term at least.”

“We would not be surprised to see more intervention ahead of the BoJ meeting to drive home the point. If not there, then at the meeting itself.”

“While intervention is unsustainable, we think the MoF would prefer USD/JPY below 150, even if they have not explicitly said so.”