Early European action saw the Tokyo offers to 118.25 filled and larger speculative players target the stops touted tight above 118.30. A mixture of stops, Japanese exporter interest and option related offers should ensure that trade to the 118.50 level will be a choppy affair.
On the buy side the interest is patchy from 117.95 through 117.70 with the larger bids touted at 117.50. With the Dollar's performance linked to the last data release only it remains to be seen if USD/JPY can hold its Payroll bid until Thursday's US trade data for September. With the market factoring out a US rate cut in the near-term and factoring in a BOJ rate hike in the first quarter of 2007 the advantage remains with the US unit.
Japanese rates remain attractive to the carry trade trader despite plenty of analysis and press reports warning of a Yen backlash as fundamentals improve. USD/JPY looks like 118.00-118.50 with 117.95 and 118.57 the technical levels containing price at present. Interestingly there are some large option expiries with 118.00 and 118.65 strikes today.
No comments:
Post a Comment