A lack of intervention into the BoJ meeting next Tuesday would raise expectations of a policy change at that meeting – a scenario that is seen as increasingly possible. 

There remains a high risk that we see some sharp stop-loss buying that fuels a bigger move that could then offer the Japanese authorities the opportunity to intervene. 

Finance Minister Suzuki has also blurred the lines on what constitutes ‘excessive’ moves while domestically there is increasing incentive to be seen to act. 

The LDP performed poorly in recent by-elections with voters unhappy with government policy to protect households from the cost of living crisis. Standing aside and allowing ongoing Yen depreciation would only reinforce PM Kishida’s current unpopularity.