Although we think ‘symbolic’ intervention will still occur around 152.00, Japanese officials know that in the long run, FX intervention becomes unsustainable. If the USD strength persists, we think there is risk the 152.00 level breaks. 

BoJ officials have successfully convinced markets that any rate hike will be accompanied by a dovish message. The end of negative rates is in sight, and Japanese officials have noted that there has been progress made during the shunto wage talks. 

In a bullish USD scenario, we think the topside in USD/JPY could rise to 155.00. In that event, the BoJ could move the rate hike forward to March, or even deploy a mildly more hawkish message in March/April to trigger a rebound back to 150.00.