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The Nikkei has published details of  Prime Minister Yoshihide Suga’s request to officials at Japan’s Ministry of Finance not to allow USD/JPY  to fall below 100, a request that was confirmed by a number of sources. 

“Make sure the yen-dollar exchange rate does not cross the 100 yen mark.”

Market implication

Central bank intervention is a dangerous path to tread, just ask the Bank of England, for the market is far larger than any central bank. 

However, it is a ling in the sand now for the market to be aware of and the psychology is that the market knows there will be a big buyer below 100.00 to target.

Going back as far as Sep 96, the market has rarely sustained an offer below 100 for a significant period of time until 2008 which lasted a number years until 2014. 

Then, the last time the price fell below 100 was in 2016. USD/JPY reached a low of just a few pips below 99.00 and ranged between 99.5 and 107 for the summer until Nov when it rallied to the 118s. 

USD/JPY has since been as low as 101.18 during the pandemic of March 2020.