It’s estimated that Softbank bought around $20 billion USD at an average entry levels of around 82JPY in order to buy Sprint but rumours in the equity markets over the last few days suggest that this deal might be in jeopardy.
If the deal is scrapped, then Softbank will look to sell 20 billion USD/JPY quick sharp, which will surely drive the pair sharply lower (500/700 pips depending on market conditions is my best guess). Whatever happens, USD/JPY is going to be very sensitive to any news regarding this deal’s future.
[On a slightly side note, what a great deal it would be for Softbank if they booked a break-up fee of $600 million and an FX profit of $2.5 billion! That would surely qualify as the best non-deal in the history of deal making!!]