It’s all about whether a further run higher will trigger intervention from Tokyo at this stage. It’s a psychological game for the most part, and you can even coin it as a game of chicken. Do buyers have more resolve or does the conviction sit with Japanese authorities instead? The thing to watch is still whether or not this move is deemed as going too far, too fast.
USD/JPY daily chart
In April, it took all but two days to jump from 155 to 160. This time around, the move is playing out in a span of about four weeks. But still, we’re back at the key threshold again in any case.
The overnight high touched 160.87 and price is now trading back to 160.30 levels on the day. So, we’re not seeing buyers run away with things just yet. There is definitely some caution in the air. But all else being equal, it seems likely buyers will keep gradually trying to test the limits here. That until Tokyo decides to step in again that is.