UK/EU Session Update: Crunch time for
#USDJPY
All eyes are on the yen this week and particularly USDJPY, as we have both the BOJ (tomorrow) and the Fed (Weds).
USDJPY already looks problematic as it bounces back from the Iran dip, while USD holds weaker in other pairs.
Specs increased yen shorts last week to 146k vs 130k (CFTC data).
The intervention risk is high.
If the BOJ hikes and we see any yen strength quickly dissipating, that intervention risk is going to rise, and then if the Fed gets USD going higher, that risk increases further, unless they yen is strengthening in the crosses.
The 160 area remains a massive level and the intervention risk really comes down to what side we're on after both events, and to what degree.
Keep an eye on the BOJ Yendex as a guide (last at 72.55 and near all time lows) but the MOF might not wait for that if the PA is showing fast and larger weakening.