Another Round Figure Gives Way

Intensified official warnings on yen weakness failed to arrest its relentless slide on Tuesday. To the contrary, participants took FinMin Suzuki's comment that the exchange rate is determined by the market for an invitation to keep dumping the Japanese currency, even as the official wagged his finger at its rapid depreciation. USD/JPY extended gains after Suzuki's comments and soared to fresh multi-year highs, piercing the Y128.00 figure in the process, in what constitutes the rate's longest winning streak in more than half a century.

• The yen remains the worst G10 performer in early Tokyo trade, as USD/JPY jumped upon breaching another round figure resistance at Y129.00. The rate last deals at Y129.20, up 30 pips on the day.
• The next layer of resistance is provided by Y130.00, with participants trying to assess the likelihood of official intervention around that level. Note that the last time the BoJ stepped in to prop up the yen was during the Asian currency crisis in 1998.
• Measures of USD/JPY implied volatility are also headed north across all maturities. 1-year tenor surged to its highest point in two years on Tuesday.
• Japan's monthly trade report comes out shortly, with national CPI figures due Friday.