Mitsubishi UFJ said Japan-U.S. joint FX intervention appears to have been
short-lived; USD/JPY has since recovered above 159 this week. After so sharp a
drop in the pair, market appetite to buy yen may remain subdued in the near
term. Some participants, notably retail FX margin traders, had been short
USD/JPY but the recent rebound likely prompted selling of yen to cover those
positions. Those shorts may already be closed, and at current lower levels
mean-reversion/arbitrage (not directional) strategies may regain appeal,
encouraging renewed buying of USD/JPY.