• Fin Min Katayama: Japan ready to act on FX volatility, mindful of US bond market impact

• However verbal warnings are unlikely to stop the USD/JPY recovery

• USD/JPY traded above Monday's 156.38–158.91 cloud but failed to close beyond it

• However last Friday saw spot close above the 158.54 Fibo, keeping the bias on the upside

• 158.54 Fibo is a 61.8% retrace of the 160.72 to 155.00 intervention induced (EBS) drop

• A daily close above the cloud top, on Tuesday, would strengthen the bullish outlook

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

Daily Chart


Correlation Chart


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