Dollar/yen still mostly taking its direction from the Nikkei. News that the Japanese government would urge public pension funds, with a total pool of $2 trillion, to increase investments in stocks and non-domestic assets sent the Nikkei higher and the yen lower. Generally, the BOJ’s easing has pressured Japan’s institutional investors to seek returns in riskier assets anywhere but this latest news is a fundamental shift. The yen’s recent range has widened to 98.85 to 103.50 after breaking the psychological 100 yen level and more than a few stops and options barriers around there. Recent moves have seen the dollar/yen flirt with the 50-day simple moving average, a technical level it bounced off in early April. Volume is around USD3 billion a day on one major platform which is still higher than the historical daily average of recent months. Most speculators are still short the yen as far as we know from official data. But someone is hurting given the yen’s recent gyrations and the big players are reported to still be betting on a run to 105. Watch for the flows to increase and spot trading to point to lower levels of dollar/yen on a sustained basis for clear signs that the break out is lower and large investors are capitulating.