The yen extended Asian-session gains after a sharp rise in US trading yesterday,
reviving speculation Japanese authorities could intervene in FX markets. MAYBANK
said heavy yen short positions mean any positive trigger could prompt rapid
appreciation. Supportive factors include comments from a hawkish Bank of Japan
board member on the pace of rate increases and market talk the Government
Pension Investment Fund (GPIF) may rethink asset allocation. MAYBANK added that
large rate hikes remain speculative and that GPIF-driven repatriation would take
time; it warned USD/JPY faces two-way risk and the potential for sharp
volatility.
