A 4.5% fall in Japanese machinery orders during March knocked the Yen in overnight trade but the pick up in USD/JPY was short lived and early European action saw the Yen recover to 120.10 from 3-month lows of 120.53. China and country ratings the other factors at play for the Yen.
Market jitters over Chinese policy and reference to a faster CNY rise has kept the Yen active while talk of a possible Moody's upgrade to Japan's sovereign rating held market attention but had little impact. The weekend G-8 meetings are not expected to deliver anything meaningful for the forex market and with no change in rates expected at the BOJ the outlook is once more focused on the U.S data run and the trends in the carry trades. USD/JPY is holding softer levels as coupon and redemption payments favour the Yen.
Exporters have also been active in the 121.30 area and there is talk of heavy corporate offers ahead of 120.60. Stops are touted above 120.65 mixed in with option offers ahead of a 120.75 barrier. There is also talk of a 120.50 strangle expiry this Friday, which might be having a sobering effect on price.
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