Yen traders warn about a possible Bank of Japan’s intervention

The yen has moved closely to a highly watched level of 150 per dollar, keeping investors in alert for possible interventions aimed at supporting the Japanese currency.

At the moment, the yen is roaming around the level of 149 per dollar because the Prime Minister of Japan, as well as the central bank chief are intended to maintain the current financial policy, despite the criticism of this position from traders who fear the yen’s fall.

Yen watchers outline that the government might be mostly focused on the speed of the currency’s fall, therefore, doesn’t pursue any exact price level for further actions. However, some still consider the level of 150 yen per dollar as a key psychological benchmark for Japan, breach of which may raise pressure on the government, demanding its actions.

Yuji Saito, executive director at Credit Agricole CIB’s foreign-exchange department in Tokyo, suggested that if the currency pair dollar/yen rises above the symbolic level of 150, then price action will naturally accelerate, and the government either intends to prevent it from happening or buy time. For the last few days, price action on the level of 149-150 yen per dollar matches conditions under which the government might intervene and take needed actions.

Greg Anderson, Bank of Montreal’s global head of currency strategy, added that markets tested the level of 149 for resistance, but didn’t find any, thus, the probability of another Japanese intervention in order to regulate the situation within the following 24 hours is extremely high.