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USD/JPY steady near recent highs

Yesterday, as the US stock markets reopened, there was actually a very steep fall in the USD/JPY, which sent it lower in a heartbeat, but it did not fall much below the 154 handle. Besides, it rebounded almost immediately. However, since then there has been some speculation, that this move might have been caused by the Bank of Japan selling the dollar. To be honest, whilst not ruling that out entirely, it would seem unlikely. Earlier today an update was promised; to briefly look again at the tactics most recently employed by the BOJ in terms of any intervention and this works both in terms of buying, or selling the dollar. On this occasion it is dollar selling that is in focus of course. So, in order to have the most impact, the BOJ would ideally like to get the market stranded at the wrong end of the price action, as that will have more impact and let the market do much of the work for them. So, what we should be on the look out for, is a sudden news/event/data driven move that sends the USD/JPY charging sharply higher. That might not happen, but if it does that would be the time to exercise caution. All the while the USD/JPY grinds higher it might not tempt the BOJ into action. Of course that is not a given either, more a potential prognosis to bear in mind. The USD/JPY is just now trading at 154.62
 

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