One of the key measures monitored by the BoJ that we track – contractual pay for full-time employees (so ex-bonus and ex-overtime) – slowed from 2.0% to 1.5%, the weakest reading since April. Given that wages will be such a key determinant in assessing whether price stability has been achieved, this data certainly lowers the probability of any near-term surprise removal of NIRP or another change in YCC.

It seems therefore more likely that we will see USD/JPY grind higher and retest that level just above the 150 mark that prompted a sharp reversal. That of course could come as soon as this afternoon if the US jobs report was to prove stronger-than-expected.

We’d still expect a clearer break higher well through 150.00 before the MoF would intervene.