USD/JPY is now at 118.56 after bouncing off lows of 118.43 this morning. Real money buying has been seen off the lows with Japanese investor bids still reported at 118.40 and 118.30. Offers remain at 119.00 staggered up to 119.50 but with the bulk of offers around 119.00-15 and stops mixed in at various levels. Some larger stops are reported at 119.20.
A consistent theme in the Japanese press remains the ongoing demand from Japanese retail investors for higher yielding foreign assets. The proportion of foreign asset holdings are still said to be quite small and expected to rise with new fund launches through April and into Golden Week expected to drive JPY weakness. Some analysts are even forecasting a rise above 120 to 122 in coming sessions as a result.
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