USD/JPY gained more than 100 pips on Friday after the Bank of Japan delivered another dovish hold. Economists at BBH expect the pair to target 152 on a break past 149.35. 

Data suggest the BoJ cannot maintain a heavy pace of intervention

“A break above 149.35 would set up a test of the USD/JPY high near 152 from October 21.”  

“Reports suggest the BoJ recently spent JPY6.35 trln supporting the yen. In total, these interventions represent nearly 6% of its total foreign reserves and so it’s clear that this pace cannot be sustained on a regular basis. Rather, we think the BoJ will continue to intervene sporadically and quietly to try and keep the markets guessing.”

“With the BoJ delivering another dovish hold last Friday, we think USD/JPY remains a buy at current levels.”