Path of least resistance may be skewed to the upside given USD strength. While there are chatters of the risks of BoJ intervention, it is important to note that policymakers care more about excessive volatility than the level in itself.

Beyond the near term, we expect USD/JPY to trade lower on the back of a moderate-to-soft USD profile (as Fed tightening stretches into late cycle and that USD can fall when pause or pivot comes into play) and on expectation for further BoJ shift towards policy normalisation amid higher inflationary pressures in Japan.