TD Securities senior Asia economist Alex Loo and FX strategist Howard Du say in
a note that if the dollar/yen uptrend continues after this week’s central bank
meetings, the probability of Japanese intervention is high. They cite the real
effective exchange rate as evidence of clear yen weakness and say limited
volatility does not rule out renewed FX intervention. TD flags USD/JPY 162 as
the next possible intervention threshold but adds that, given the dollar’s broad
gains, Japan’s Financial Services Agency may wait until about 165 before acting.
