Something for your Espresso: How’s the mood in the room now, Lagarde?
Good Morning from Europe!
USDJPY is currently not being hindered in moving further up (almost 150.50) and as we have warned about, markets will see it as risk asset negative if the USD breaches key thresholds versus JPY and CNY.
We would be surprised if the Japanese authorities intervene in JPY markets just a few days ahead of the BoJ meeting, but one probably needs to be vigilant here. Gravity calls for JPY (and CNY) as fair values are still higher than spot in USDJPY terms – probably around 157 at least.