It seems that the Japanese government is not very comfortable with the 150 level on the USDJPY, as there was again a very strong and rapid pullback on the USDJPY. The pair fell from the 150.76 level to the 149.85 area, but very quickly returned to the 150.5 area. Earlier in October we saw such movements, but only once above 150. We have no comment from the Japanese Ministry of Finance on whether there was an intervention. The Nikkei recently hinted that the BoJ was expected to consider increasing the band of fluctuation for 10-year yields at its upcoming meeting, as these are clearly piercing the 0.5% level, although they remain below 1%. Levels of 0.5 to 1.0% are said to be tolerable, as the BoJ is buying bonds at levels near 1.0% to drive yields lower.
