JP Morgan continues to underscore the vulnerabilities of the Japanese yen currency, in saying that a push above 154.35-50 could quickly see USD/JPY run up towards another test of the 155 mark. And in turn, that could trigger fresh verbal intervention from Tokyo. Well, that's something we're already seeing here earlier today.
But as for actual intervention risk, the firm notes that the key 'danger zone' is around the range of 157-160 for USD/JPY. That especially if the move higher in the pair is one that is rapid and speculative. In other words, JP Morgan feels that we're not that far away from a point where Tokyo might feel compelled to take action in the market again.
They do mention though that if the Ministry of Finance's response remains limited, the upside momentum could accelerate towards the upper end of that range sooner or later.
From yesterday: Limited risk of JPY intervention for the time being, says Goldman Sachs
