JPY was back under pressure, extending the losses recorded in the Asian session. USD/JPY saw ongoing Japanese interest and this was joined by European interbank names. The pair cleared 119.00 and 119.20 exporter offers and pushed through stops above 119.25.
Exporters are expected to remain active, with quite a few orders noted towards 119.50 and 119.75. The JPY crosses performed well amid reports of Japanese retail investor demand and fresh carry trade interest. EUR/JPY performed well and extended up to 155.38 after offers were cleared early on in the European session. GBP/JPY activity relating to Japan Tobacco's purchase of Gallaher was tipped and real money related interest.
AUD/JPY performed well and NZD/JPY saw fresh inflows. Near-term prospects for JPY remain negative, with yield hunters still encouraged to sell. Japanese long-term rates are expected to under-perform vs the rest of the developed world and this is fueling fresh carry trades and leverage fund activity. Next week's BOJ meeting may stymie some of this activity, although the impact is now seen as minimal.
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