The market was held in a narrow trading range. Yesterday's plunge below 118.00 in USD/JPY was all but forgotten today as the pair pushed on to 118.82. A pick up in leverage fund activity and interest from investment names was noted. The pair was unable to overcome 118.80/90 offers and drifted into 118.60. There was little movement for the remainder of the session.
EUR/JPY settled at 161.40 after surging higher in early European trade to trigger stops at 161.75. Offers came in ahead of 162.00 and the pair printed a 161.97 high before profit takers moved in. Some European concern over the lofty Euro weighed, yet investment trust demand and carry trade interest limited the pair to a steady drift lower. A limited data schedule should limit price action into the weekend.
Option strikes in EUR/JPY at 161.00 may increase profit taking activity, while USD/JPY has outstanding interest of its own at 117.25 and 118.50 and 118.65. Next week sees a slew of investment trust launches. Amounts of Y600 billion are due and should result in decent trust bank and custodial name demand for the JPY crosses and USD/JPY on any pullbacks.
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