JPY is weak across the board again. USD/JPY looks bid on the back of more strong economic data overnight and further moves up in US yields. US investment house demand was aggressive taking out option triggers at 120.00 and 120.10. The pair extended through 120.40 stops to print a 120.42 high.
Option related selling and exporter offers cap gains but the pair remained bid leaving the pair in a narrow range into the US session. The JPY crosses performed well, with macro account and real money demand noted through EUR/JPY, GBP/JPY and AUD/JPY. Appetite for yield remains high, with GPB/JPY buoyed by the surprise hike in UK rates and stronger than expected Australian jobs data overnight.
Official rhetoric from Japan also played down the prospects of a Japanese rate hike, which continued to underpin across the board. Option strikes at 120.00 and 156.00 respectively may contain USD/JPY and EUR/JPY but it is likely that fresh flows will undermine JPY going forward. Market is looking towards the US initial claims data for the US session. Last week's reading of 329,000, which if not reversed, could signal labour market weakness.
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