USD/JPY bulls may need to fasten their seatbelts if the pair threatens 145 again, after the Nikkei reported that the Bank of Japan checked FX rates on Wednesday in apparent preparation for currency intervention.
The 145 level looks to be a line in the sand above which the risk of BoJ action to sell the dollar against the yen will increase, given that the Jiji news agency said USD/JPY was around 144.90 when the BoJ made its FX rate check. nL1N30K2R9nL1N30L0J5nL1N30L09I
USD/JPY first threatened 145 a week ago, when it scaled a 24-year peak just shy of the level.
This week's jump towards 145 was spurred by a hawkish shift in Federal Reserve rate expectations following Tuesday's hotter than expected U.S. August inflation data. nL1N30K0ZHnL1N30K10O
The latest CFTC data showed IMM speculators raised gross JPY shorts by 18,147 contracts to 114,191 in the week ended Sept.
6, lifing the net JPY short position to 58,189, the largest since late July. nL1N30G277
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