Yen Dives Again After Taking Breather

USD/JPY capped its historic winning streak on Wednesday, as demand for the pair petered out above Y129.00. It may have been that some participants grew wary of a potential intervention around the psychologically significant Y130.00 figure, with government officials reiterating their warnings on rapid yen weakening (even as such scenario is seen as rather unlikely at this point).

• Late doors on Wednesday, the IMF's Japan mission chief noted that the yen's moves "are reflecting fundamentals at the moment," adding that the BoJ should continue with its ultra-loose policy settings.
• Economists expect that USD/JPY would have to cross above Y130.00 to prompt the BoJ to revisit its policy or messaging, according to the median estimate in a Bloomberg poll.
• Reminder that Japan's central bank announced a series of unlimited fixed-rate JGB purchase operations in defence of its 0.25% cap on 10-Year yield.
• Yen sales have resumed this morning and USD/JPY last trades +24 pips at Y128.10. A break above yesterday's high/0.764 proj of the Feb 24 - Mar 28 - 31 price swing at Y129.40/44 would bring the Y130.00 figure into play. Bears look for a retreat under yesterday's low of Y127.47 and further towards Apr 19 low of Y126.98.
• Final machine tool orders will hit the wires today, before focus turns to CPI data, due Friday.