M&A and trade shifts are stemming JPY's rise and helping temper any move back toward 103.50 or even 102.00 despite the USD weakness that has driven currencies such as EUR and AUD higher. Dealers have been calling for USDJPY to fall to 102 or even 100 in recent sessions as the yield spread moved against the USD and in the wake of the Wall St. crisis, and yet USDJPY continued to find strong support. The Dollar-Yen (USDJPY) hit an intraday low of 103.53 on 9/16, but has bounced back to hold near 105.80.
One factor has been M&A highlighted by recent MUFG deal with Morgan Stanley and Nomura's purchase of Lehman assets. An International Herald Tribune article points out that Japanese M&A outflows have quadrupled this year compared to the same eight months last year. The other macro flow keeping JPY weak is the shift in trade as highlighted by today's data which shows exports falling on slowing global growth while imports continue to increase due to rising raw material and oil prices.