USD/JPY is holding comfortably above the 118.00 handle after making modest gains from the 117.80 area in the Asian session. JPY has experienced a broad based sell-off since the early Asian hours, with traders speculating on a possible downgrade in the November Japanese government report.
A government source claimed that the downgrade in the economy is due to sluggishness in personal consumption and will be the first backward step in the government's economic assessment for two years. A shift in economic conditions will be a boost for carry trades. EUR/JPY has already pressed higher, trading through the previous high to record a 151.67 high.
USD/JPY is underpinned, although well within the recent 117.10/118.60 range that has dominated for the last two weeks. Offers are noted at 118.20 and 118.45/50, while stops are seen through the range top at 118.60.
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