highlights

What time is the MOF?

The speed of USDJPY does not justify intervention but levels might soon

January 13, 2026

Kathryn Cooper uses chronophotography to capture the patterns and movements of murmuration of starlings

Current Views

Limit orders sell USDJPY at 159.24 and 159.74
Stop loss 163.26
Take profit at high minus 3.5%

MOF

USDJPY is scooting higher as the prospect of Takaichi gaining an even stronger grip on power keeps the momentum going and the Japanese government is going to have to do something about the yen soon or risk losing credibility. The normal measures of JPY depreciation speed that trigger intervention are not close to being met, but the massive divergence from interest rate differentials, new lows in TWI, and the looming 160 level in USDJPY mean we may see intervention sooner rather than later.

I think it is worth scaling into a USDJPY short from here to 160.00 on the expectation that we will see intervention at or near that level. The challenge with positioning for intervention is that the MOF does not usually come in exactly right when you wish they would and USDJPY has an annoying habit of accelerating into the intervention zone, not decelerating. So, the stop loss needs to be wide enough to survive that last push higher. If you sell half a position at 159.24 and half at 159.74, your average is 159.49 and then a stop loss at 163.26 allows you to risk 2.3% to make 3.5%, roughly. MOF interventions almost always move USDJPY between 3.2% and 4.0%. Trade details in the sidebar.

In a dream world, you would want more leverage than this, but a tighter stop is likely to bring tears and playing via options is too annoying because we could easily just range trade 158/160 for a while and you miss the trade when your option expires.

For absolute clarity, we are nowhere near the normal speed in USDJPY where the MOF has intervened in the past. The Kanda 10-yen rule, for example, does not come in until 164ish. I am making the call that given the persistent and extreme rhetoric from Katayama, we will see intervention before that.

Note too that the MOF has intervened on CPI day in the past, so anything is possible.

Final Thoughts

I am keeping it short today as the data hasn’t changed the story much and I don’t have a strong macro view right now. I know it’s not really great when you write a macro newsletter and you don’t have a strong macro view, but I would rather be honest than force it.
Noah Smith on price controls.
Oil sneaking higher again. I suppose a huge rally in crude would be something few have on their bingo cards for 2026. Not my view, but I suppose you could say that the price action on the Venny news is bad news/good price for oil. While there is no imminent supply shock coming out of Venezuela, it’s the kind of story where crude could easily have sold off on that news if it wanted to. It didn’t want to. This could argue at least for selling put spreads.