###POV Is 105 the line in the sand for...>

DOLLAR-YEN: ###POV Is 105 the line in the sand for USDJPY?

The latest run of JPY strength occurred against higher US yields stoked by US

deficit worries, BoJ appointments/re-appointments signalling continuity & a pick

up in market volatility driving JPY demand.

- The move bottomed around 105.50, the monthly high from Oct '16 & provided a

break of the 107.30-118.60 range from '17. A range that we have quickly retraced

to following comments from Japanese off'ls warning against such "one-way moves".

- The most recent off'l to speak out on JPY-pertinent matters was Abe's trusted

advisor Hamada who suggested that the BoJ should consider buying foreign bonds.

Although the BoJ is prevented from doing so under Japanese law, if it has the

goal of influencing the JPY. These comments came after reports that the JPY

strength was triggering lifers/pension funds into accumulating foreign assets

without hedging their FX exposure (a view met with scepticism by many in Japan).

- The recent rhetroic/investor impulses could mean that USDJPY @ 105 represents

a line in the sand, although it could be tested with the typical window-dressing

around Japan's FY year end in March set to add weight to the cross.