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 JPY VolatilityTraders are questioning whether we’re seeing the first signs of intervention today by Japanese authorities after USDJPY suddenly plunged around 1.2% before reversing the losses immediately. Overnight, the BOJ held policy unchanged, defying those expecting a policy response on the back of recent JPY deterioration. The bank reaffirmed its message that it does not target FX rates directly with monetary policy but will continue to monitor markets. Governor Ueda warned that rapid JPY depreciation is not desirable and the bank will intervene if necessary but so far, sees no need to.
 Flash CrashUSDJPY has rallied another 7% off the April lows, taking the pair up to levels not seen since the 1990s. With price now trading above levels which saw Japanese officials intervening last year, traders are questioning at which point we are likely to see action. No official comment has been received on the price action we’ve seen today and it’s not clear whether this was simply linked to algorithmic trading errors ( so called ‘flash crashes’) or something else.
 Level to WatchBloomberg is running an interesting piece today saying that an analysis of comments from Masato Kanda, the top currency official at the Japan MOF, 157.60 is the level to watch for intervention. With price now fast approaching that level, intervention risks are certainly ballooning. However, speculators are simply betting that without firm action from both the BOJ and government in unison, any reaction will prove short-lived.
 Technical ViewsUSDJPYThe rally in USDJPY has now taken the pair firmly above the 151.81 level with price now pushing up towards a test of the bull channel highs, stalling around the 156.42 level currently. Momentum studies remain bullish here, keeping focus on a continuation higher towards 158.28 next. Back below 154.89, 151.81 remains key support. More By This Author:US Dollar Commentary – Friday, April 26Meta Commentary – Thursday, April 25Copper Market Commentary – Thursday, April 25