USD/JPY can remain sensitive to US rates – DBS

USD/JPY rebounded towards 149, and pulled back a bit afterword, DBS’ FX analyst Philip Wee notes.

Intervention does not appear to be an imminent risk

“USD/JPY had rebounded towards 149, with PM Ishiba dissolving the Lower House yesterday for elections on 27 October.” 

“New Japanese Finance Minister Kato had warned on Tuesday of the negative impact of sudden JPY moves, underscoring a discomfort with renewed JPY weakness.”

“With speculative positioning still not deeply short, intervention does not appear to be an imminent risk, and USD/JPY could remain sensitive to US rates for now.”