Analysts on BOJ intervention risk

Economists argue that the Bank of Japan might want to avoid USD/JPY returning to the range of 76-78 yen within which it was trading in the second half of 2011. Japanese officials have made a lot of comments speaking about their readiness to act counter volatile moves in the national currency. Yet, as it always is with Japan, it’s very difficult to judge the real intentions of the policymakers. Here’s what the analysts think.

Barclays Capital: “We see the increased chance of JPY selling intervention by the Japanese authorities, or at least verbal intervention with a tougher tone below 78 yen.”

MIG Bank: The BOJ may intervene if USD/JPY slides below 77.65.

Citibank: The market has become very used to such threats of “decisive steps”. Our basis view is that intervention may not come until the dollar falls below 75 yen.