JPY: Reports suggest intervention on the high side Reports emerged yesterday that the Bank of Japan's intervention on Monday could have been towards the high side of expectations at JPY5.5tn or around $34bn. This is based on calculations from the BoJ's current account balances and the net drain of yen funds as FX operations were settled. As we discussed yesterday, this will be part of a new campaign for Japanese policymakers as they seek to break the one-way cycle for the yen. However, Japanese policymakers are only too aware they are fighting a powerful dollar bull trend. If the Fed is hawkish tonight, USD/JPY could easily creep back to the 158.50/159.00 level. Perhaps more support for the yen could come from a broad risk-off move post-Fed. A sharp equity correction and rising volatility would prompt VAR-driven deleveraging of the carry trade and support the yen. Crosses like AUD/JPY and MXN/JPY would again be most vulnerable under such a scenario.