There’s no stopping the drop in the yen at the moment as the BOJ didn’t do the currency any favours in its policy meeting decision today. USD/JPY has briefly clipped the 131.00 handle now, and is up 2% on the day. What a move.
I outlined earlier here why the BOJ decision to keep up with fixed-rate operations won’t do the yen much good and the fact that Kuroda continues to ramble on about ultra easy policy continues to underscore the monetary policy divergence between Japan and the rest of the developed markets, barring Switzerland.
As we get to 131.00, I would expect more verbal intervention to follow from Japanese authorities in the days/weeks ahead. The 2002 highs close to 135.00 will be the next key level to watch but even that may just prove to be a speed bump on the way up.