USDJPY continued to gain momentum as the dollar fell to an 18-month low against the yen in yesterday's trading. Knocking off the crucial 110Yen level, USDJPY fell 1.40% yesterday to close at 108.18Yen. Comments from Japan's chief cabinet minister, Suga fell on deaf ears as he said that the authorities were keeping a close eye on the exchange rate. Japan and the BoJ is caught in a corner as the general assumption has been not to intervene in the markets. However, the rapid appreciation in the yen has sent the Nikkei225 weaker and one of the worst performing indices this year. Economic data from Japan remains weak and a stronger yen is likely to hit exports even more.