The decline in the yen doesn’t seem to be stopping. The Bank of Japan sent USD/JPY around 5 cents lower in September when they intervened in the forex market, buying billions of Yen, but the buying pressure resumed again for this pair.

The buying pressure is quite strong, which can be shown by the inability of the 20 SMA (gray) to catch up with the price. Yesterday USD/JPY approached the big round level at 150, which is a major milestone for this pair. The USD strength has also been a factor in this move, but the main theme has been the JPY weakness. Even the Japanese Finance Minister accepted that they’ve seen unprecedented one-sided moves in the Yen.

USD/JPY H4 Chart – The 20 SMA Can’t Catch Up

USD/JPY edging closer to 150

Although it is hard to really tell if another intervention will keep this pair down, and after having seen previous rounds fail to hold for long, it is tough to really say what Japanese authorities would do. I would expect the next round of intervention closer to 150 to be a rather big and powerful one instead.

Bank of Japan Governor Kuroda Speaking from Parliament:

• It’s true recent sharp yen fall, coupled with the raw material price rise, driving up japan’s prices
• Consumer inflation is likely to accelerate toward year-end before sliding below 2% next fiscal year
• There is very high uncertainty on how fx fluctuations and global commodity prices affect domestic prices
• BOJ will keep a close eye on fx, market moves, and their impact on the economy
• Very few people I met in Washington expected the dollar to continue rising against most other currencies, as is the case now
• USD/JPY appears to be moving in parallel with Japan-US short-term interest rates gap now, but in the past, there were cases where they did not move in parallel

USD/JPY Live Chart