• USD/JPY has climbed on Monday, has seen a 158.64-159.08 range on the EBS

• It has broken the top of the daily cloud, which currently spans the 156.38-158.91 region

• If there is a daily close above the cloud top, that would be a very bullish development

• Verbal warnings are unlikely to stop the USD/JPY recovery

• However, the market remains nervous due to lingering direct intervention risks

• 30-day log correlation between USD/JPY and EUR/JPY is above +0.5 (pairs moving in tandem)

• Japan's extra budget to include funding from fresh debt, Reuters source says

Correlation Chart


Daily Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)