Yesterday, the Japanese yen tested all-time highs vs. USD as risk aversion in the market picked up after the ISM manufacturing report disappointed. This has brought about increased speculation that the Bank of Japan will intervene in the currency. Thursday’s rate policy meeting could be the day if it is going to happen.
Last Wednesday’s trade call to buy USD/JPY has been triggered and is still in tact, with our stop being tested by under 5 pips! Currently, the trade is slightly lower, though sitting above the daily pivot level. Should intervention occur, then we could envision this trade being fulfilled quickly.