Target 128, stop 120, entry 122.60
While we expected the BoJ to be on hold and JPY to rally, it has now overshot
real rate spreads against USD and particularly EUR. Fair value in the latter is
130. Yen positioning was heavy pre-BoJ and has likely got more crowded since,
while technicals indicate the yen crosses are highly stretched. Moreover, the
threat of MoF intervention is credible at current spot levels.