Bankers say there has been suspiciously little selling of USD/JPY from Japanese exporters into the frantic rally seen in recent weeks. One can conclude that Japan Inc. truly expects an aggressive shift in policy from the BOJ or that Japanese finance official have been quietly asking the exporters to refrain from selling, hoping upward moment takes on a life of its own (mission accomplished!)
If exporters have refrained from selling based on government coercion, I’d expect them to look to protect themselves if USD/JPY starts to turn south again. Keep an ear out for heavy buying of USD/JPY puts in the 85.00 area as well as stop-loss sell orders in that region from exporters. If and when we do give back some gains it could get interesting if the pent up selling interest is unleashed all at once.
