USD/JPY Bulls Ignore Intervention Risk as Yen Surges
The Japanese yen's value has surged against the US dollar (USD) following the latest Federal Open Market Committee (FOMC) meeting, supported by rising US yields and a stronger US dollar.
A record-high short position against the Japanese yen in futures markets reflects traders' confidence in a weaker yen, but it also suggests they are disregarding the risk of another Ministry of Finance (MOF) intervention.
The MOF's decision to intervene is not without cost and may have limited impact if it fails to convince USD/JPY bulls that authorities can alter the trend of a rising US dollar.
USD/JPY has broken through previous highs, making Japan's authorities vulnerable. Unless the MOF feels the need to fight this trend, pullbacks are likely to be shallow and short-lived.