USD/JPY is now flat on the session at 128.12 after touching as high as 131.57 in the aftermath of the BOJ decision.

The BOJ might have burned the short-term specs but it looks like the strong hands used the higher levels to reload. Ultimately, the BOJ will have to normalize and owning more than 100% of some Japanese government bonds is not a recipe for long-term QE.

Adding to the weakness in the last 30 minutes was a weak US retail sales report. That’s added to speculation that the Fed won’t get above 5% and may have to cut later this year.

There could be some stops below 128.00 but I wouldn’t expect large ones. Kuroda is scheduled for a Friday interview in Davos on CNBC at 1000 GMT (5 am ET) and that’s going to be an interesting one.

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