USD/JPY is on a firm footing, yet struggles to extend beyond the European morning high of 121.38. Good two way interest is noted around the 121.20-40 zone, leaving a narrow trading range. Carry trades interest and investor demand remains a background influence, while the topside is being hampered by model fund offers, exporters and outstanding option positions.
Today's NY option cut sees large size 121.25 expiries rolling off. These have provided support into the US session and continue to underpin ahead of the 15:00GMT expiries. The topside should be hampered as we trade into the cut but beyond there prices may begin there uptrend.
Technical watcher note mildly overbought reading on the hourly studies, which may provide further sideways to corrective movement. Overall though there appears to be little standing in the way of this uptrend, with both technical and fundamentals supporting further JPY losses.
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