ING says:
- Japanese authorities have allowed the US dollar/yen to trade above its April intervention level.
- Previous comments from currency officials suggest the new boundary is closer to 165.
Bank of America also named 165 as the new level at which Japanese authorities should step in. Bank of America argues that if the Bank of Japan were to scale back its bond purchases (which it has indicated it plans to do at its July 30-31 meeting), that would not be enough to support the yen. Bank of America sees the dollar/yen trading at 158 yen by the end of the year.
It’s been a quiet start to the week for the yen so far, but with it approaching 8am in Tokyo and 7am in Singapore and Hong Kong, things should pick up steam soon.