Credit Agricole CIB Research discusses the scope for further JPY intervention.
"USD/JPY has surpassed intervention levels and broken through 146 in a test to the MoF's resolve to hold the line. In terms of technical resistance, there is not much in the way of further USD/JPY strength until the 1998 Asian Financial Crisis high of 147.66...Yesterday, JPY Czar and Vice Finance Minister for International Affairs Masato Kanda said he could intervene in the air and on the way to Washington if needed, but there are few signs of that so far. At the heart of the matter is whether or not the MoF will defend the 146 line and so intervene soon or take a sniper approach to intervention and save its bullets to tactically pick off investors that get long USD/JPY," CACIB notes
"We estimate the MoF has about USD120-130bn to use for intervention before it has to start selling USTs and so it has another five to six shots if they intervene at the USD20bn rate it did on 22 September. So, we favour the sniper approach. Our FAST FX model estimates USD/JPY's short-term fair value to be 149.33; so where it should be in the absence of BoJ intervention," CACIB adds.