With the USDJPY crashing to a fresh 17 month low, sending the Nikkei down 2.3% and taking out levels during which we have seen direct BOJ intervention in both February and March, many were wondering how a panicking Japan would try to push its currency lower. The answer was revealed moments ago, with the following Reuters headlines:

More from Reuters:

Bank of Japan policymakers will likely debate the possibility of easing monetary policy further at a rate review this month, as a raft of gloomy data threatens their scenario that a moderate economic recovery will accelerate inflation towards a 2 percent target, sources familiar with their thinking said.

If the central bank were to act, it would more likely increase asset purchases than cut interest rates, the sources said, as financial institutions are still scrambling to adjust to a negative rate policy deployed in January.

But a decision on whether to ease at the April 27-28 review will be a close call as many BOJ officials are wary of using their limited policy tools again so soon, especially as the negative rate move has proved unpopular among the public.

“It will be a question of whether the BOJ feels it has forestalled risks in January or whether they feel that January’s action wasn’t enough,” said one of the people familiar with the BOJ’s thinking. (Reporting by Leika Kihara, Sumio Ito and Yoshifumi Takemoto; Editing by Ian Geoghegan)

Will the BOJ increase QE as this headline suggests? Most likely not, as there are simply no more bonds to monetize; it may increase equity purchases but that would make the Jaoanese market even more facrical.

What is troubling is that, as noted above, at previous key support levels for the USDJPY, the BOJ intervened directly in the market. This time, it couldn’t even do that and was forced to spread leaks via the traditional trial balloon conduit, Reuters.