It’s still a hard one to read as to whether or not the 90-pip drop in USD/JPY earlier had to do with Tokyo intervention. The size and speed of the fall is suggestive but then why all of a sudden at 150.70 and not at a level just above 150.00 again like before? There are certainly some question marks about that. But since then, the pair has stabilised somewhat although traders are weary about pushing it too far above the figure level now:

There is the possibility that the drop was also triggered by the algos, with there being a note by BofA touting the possibility of the BOJ raising its 10-year JGB yield ceiling to 1.50% next week. That comes amid the rising pressure in bond yields globally. But in any case, the fact that USD/JPY is able to work its way back up above 150.00 is convincing enough to say that the drop isn’t one that matters all too much from a technical perspective – at least for now.

That being said, the dollar has since cooled off and is now trading mostly little changed across the board as the earlier gains are now looking rather tentative in European morning trade.

This article was written by Justin Low at www.forexlive.com.