160 Yen Offense and Defense Battle! Will next week's USD/JPY handle the “intervention trap” once again start moving?

160 Yen Defense and Offense Battle! Next week's USD/JPY, will the “intervention trap” move again?

Over the weekend, the dollar/yen surged to the upper 158s in overseas markets. The market’s focus is once again on the “160 yen round figure,” and on “foreign exchange intervention by the government and the Bank of Japan.”

Next week looks set to be an extremely nervous week, with the momentum to buy dollars colliding head-on with fear of intervention.

? Next week's points to watch

• Just before 160: a caution area where a “surprise intervention” could drop at any moment.

• Key US-Japan events: March domestic CPI, the FOMC minutes release, and other market-moving catalysts are stacked up.

• Technical overbought signals: as buying gets excessive, be wary of sudden drops (longs getting squeezed).