USD/JPY and other JPY crosses were range bound in a quiet European session. The Asian market tested both sides of the range, with little progress in either direction. This left indecision in the European market. USD/JPY made tentative gains after finding good Japanese support at the lows.
Buying was noted by UK and US name on behalf of speculative funds. Momentum was lacking though and the pair only progressed to 116.55 and eventually drifted back into 116.45. EUR/JPY saw similar price action. Bids at 152.70 and 152.50 from Japanese retail investors underpinned and the pair pushed towards 153.00. Offers from short-term CTAs and interbank names kept the pair close to 152.80. Dealers noted a large GBP/JPY sell order following the Tokyo fix, perhaps on the back of large UK Gilt redemptions and coupon payments.
This was cited as a potential JPY positive for the European session but the pair also struggled for direction. US equity performance and the US ADP employment report may fuel some speculative activity. Risk is still on the downside for USD/JPY and EUR/JPY after both pairs struggle to sustain a move higher in the European morning.
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