JPY was fairly stable, with USD/JPY and EUR/JPY trading towards the lower end of the weekly range. USD/JPY dipped after BOJ Governor Fukui refused to rule out a rate hike before the end of the year, although he added that policy would depend on the economy and prices. USD/JPY filled in large 119.15 bids reportedly from a quasi-official name but was unable to trade beyond 119.09 amid CTA and importer interest. Interbank names and intra-day shorts covered positions and the pair drifted higher over the course of the morning.
The topside was capped at 119.45/50 amid exporters offers and speculative account selling. Spot's failure to reassert itself on 119.80 yesterday has seen players lowering their offers, which is casting some doubt over the near-term sustainability of the uptrend. Excessive positioning in favour of JPY shorts may see stops below 119.00 and 118.80 come into play in the European afternoon. Directional bias will be tied to today's US data releases, with retail sales business inventories and Michigan sentiment due. Elsewhere, EUR/JPY continues to trades on a supportive footing, above 149.50-30 stops.
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