The yen rose 1.1% to 154.56 per dollar, its strongest since February and above
levels reached after the US-Japan joint intervention. The rebound was aided by
rising bets on Bank of Japan policy tightening and speculation that the
Government Pension Investment Fund (GPIF) may shift asset allocations. Markets
have questioned the long-term effectiveness of coordinated Tokyo-Washington
intervention in recent weeks. Japan’s top FX official Atsushi Mimura said last
Friday his stance on the yen has not changed even as the currency strengthened.
JPMorgan strategists warn a break above the 155 per dollar level could prompt
accelerated covering of large short positions, further boosting the yen.
