US NFP risk halts JPY gains, with USD/JPY and the JPY crosses managing to find a modicum of support after the early selling pressure. Risk remains on the downside, although the European afternoon will take its lead from the US employment numbers. The market is looking for a number around 110k. A pick up in risk premiums and forthcoming event risk has squeezed carry trades and this will influence near-term flows.
EUR/JPY has already extended losses to record a 154.39 low. Technical based accounts have booked some profits after the pair fund support amid trust bank and European based interest. Selling into strength remains a theme, with the pair struggling to recapture 155.00 after a brief sojourn up to 155.15/20 early on in the European session.
USD/JPY recorded a 117.99 lows amid decent selling by speculative accounts, system accounts and model funds. Japanese commercial activity was sporadic, with demand noted at 118.40, 118.20 and 118.00. The pair traded choppy but struggled to sustain any upward momentum. The 117.95-117.65 is pivotal going forward.
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