USD/JPY remains steady this morning, holding within a band of 121.40-60. A high of 121.56 has been seen since the lows earlier today with USD/JPY underpinned by JPY cross demand against the dollar bloc currencies. Also supporting USD/JPY is the rise in US bond yields with the US ten-year yield at 4.849% and fresh three-and-a-half-month highs.
Offers remain strong ahead of 122.00 however with exporter selling tipped at these levels. Bids remain at 121.20/25 with stops below. Note that the mystery buying was seen in the Japan FB auction last night but only took up 38% of the issue worth Y1.5 tln or $12.5 bln. The demand still smacks of central bank interest and possible diversification.
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