A plethora of factors have been cited behind the fall in USD/JPY overnight including talk of margin calls forcing fresh carry trade unwinding, talk of a hedge funds culling carry trades and Japanese accounts both closing carry trades but also repatriating ahead of the fiscal year end.
USD/JPY is currently at 115.53 with offers now eyed at 115.80. Bids remain at 115.15 and 115.00 with talk of a semi-official Japanese investment bid at 115.15. Option defense of a 115.00 barrier is also tipped but with talk of large stops under 115.00 from Japanese exporters.
Remember that 115.00 is the average hedge target for most exporters. US yields are bouncing sharply this morning, with ten-year bonds rising from 4.45% to 4.50% but this may not be a good sign for the USD but signs of more asset unwinding in order to offset losses elsewhere.
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