A reported Bank of Japan rate check on Friday briefly sent USD/JPY below 157.0. The move points to Japanese authorities monitoring the speed of yen moves over a rolling x-day window rather than defending a fixed threshold, which would otherwise risk establishing a clear line in the sand for markets to test.
Drivers of Yen Movement
Policy divergence remains the dominant driver. The Federal Reserve has sounded more hawkish than the Bank of Japan this month, a backdrop that leaves scope for USD/JPY to rise further and keeps a return to 160.0 aligned with prevailing conditions.
Risk of Intervention
At the same time, the risk of intervention is described as elevated.