Little direction for the Yen market overnight with the Tokyo holiday allowing the USD some respite. USD/JPY has been kept in a holding pattern since Tuesday's sharp drop from 118.04 highs and consolidation is the best the market can offers in early Friday trade.
The MOF's view that there was no reason for the Yen to weaken given the economic recovery added to the USD's woes but the dip to 116.67 was short lived as the market was reluctant to take 11th hour bets on the Dollar. The recovery to 117.28 brought Japanese corporate sales and a drift into a tight 117.10 to 117.25 Asian range.
London has extended this band to 117.00-117.25. The US NFP holds the key to pre-weekend volatility and there is scope for USD trade late in the day. With data revisions as important as the preliminary release the Sept 51k return will be watched closely.
Oct is expected to show 120K but the risk is for a softer release. It remains to be seen how much appetite the market has for shorting the USD. An in line NFP could see USD/JPY back at 118.00 but the current bets favour a 116.50 test.
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