USDJPY: Uncertainty prevails

The problem with USDJPY is this: Nobody is really sure if the Japanese Government will intervene through BoJ or any other means (as was suggested by UBS today - something to do with a coordinated effort with the Fed Reserve??). However, most currency strategists remain bullish on the yen (JPM today revised target to 79 by year end & BAML remains bullish as well, Barclays has already put a target of 83 within Aug-Sep). This suggests that most currency traders don't buy the idea that BoJ will or rather can do much on this and moreover there won't be any support from US and other countries if it wants to depreciate Yen. Therefore, it seems that the currency is more likely to appreciate over the next 1-2 months. Uncertainty still prevails, however, and the best way to trade would to wait for some affirmative action of strengthening up to 84.70 before taking a short position with a target of around 83. 30, well inside the Barclay's target. 83 will probably be a bit of uncomfortable position for short, with the possibility of BoJ intervention looming large and which may spook the investors into a bounce. Technicals also suggest a bounce close to 83. For now, we wait and watch if it reaches the elusive 84.70 again.