Yen faces speculative pressure amid Taiwan tensions – ING

The Japanese Yen remains under pressure as markets test the BoJ’s tolerance amid lingering Japan-China tensions over Taiwan. Reports that the Trump-Xi call touched on Taiwan have added to the risk premium on JPY, with thin holiday liquidity providing a potential window for targeted BoJ intervention in USD/JPY, ING's FX analyst Francesco Pesole notes.

BoJ intervention risks rise ahead of thanksgiving

"The standout in G10 remains the yen, which continues to face speculative testing of Japanese authorities’ tolerance. Reports that the Trump-Xi call included a discussion on Taiwan yesterday isn’t helping JPY either."

"The diplomatic rift between Japan and China concerning Taiwan persists, and markets are adding some risk premium on the yen based on the potential economic fallout of Beijing’s retaliatory measures."

"Thinner liquidity around Thanksgiving could present good conditions for the BoJ to intervene in USD/JPY, ideally after a market-driven correction in the pair."