Fairly flat through Asia with profits booked at levels above 117.30. Early European selling took price to 117.12, where a squeeze to touted offers at 117.40 kicked in. It took Yen remarks from MOF's Watanabe to drive USD/JPY sharply lower once more. "No reason for Yen weakness given Japan's economic recovery", the view from the MOF man.
USD/JPY sank to 116.67, just shy of the rumoured barriers. A short squeeze into the London took price to 117.00. A long weekend for Tokyo will thin the Yen market, which could lead to some explosive Friday price action if the US payrolls are out of line with market thinking.
There is talk that a large hedge fund has been behind much of the Dollar demand in the last 24-hours, which might have added an artificial bid to the market. The underlying trend remains bearish but selling is being dampened down by reversal indications on the charts. 116.60 key support with the former trend support line now providing resistance 117.70.
EUR/JPY moved in line with spot and fell to 148.86 from 149.66 European highs and then steadied at levels around 149.30-40.
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