The USD/JPY is pricing now at 78.20, 0.28% below opening price action but above the 78.00 support "which many believe is a critical level in terms of JPY-selling intervention by the MoF/BoJ."
"We believe that the possibility of intervention around the current level is not that high, although the possibility of a rate check is relatively high," says the JPMorgan Global FX Strategy team. "A rate check may see the pair spike, but it should be short-lived and fairly insignificant. The possibility of intervention would rise if USD/JPY
moves one or two big figures lower."
"Risks are to the downside in 3Q for USD/JPY," continues JPMorgan. "With speculative JPY positions currently close to flat, currency reaction according to the various moves in other major catalysts should be fairly straightforward."
JPMorgan revises its Q3 target on Dollar yen: "End-Sept targets 78 on USD/JPY (from 80)."