There is talk in Asia this morning that the USD/JPY moves today might be influenced by a maturity of a huge USD/CNY outright forward that was dealt in November, 2005 and settles today or Monday.
The talk in the market is that the PBOC sold a huge amount of USD/CNY at an outright forward price of 7.8500 one year ago and will try and engineer the price of the USD/CNY to settle at that level today/Monday. Some market analysts say that a USD/JPY trading around 116.20/25 would help the PBOC in achieving their objective of setting the USD/CNY at 7.8500.
These analysts feel that there could be a strong effort to keep the USD/JPY hemmed in between 116.10/50 for the remainder of the trading day. The USD/JPY trades 116.24/26.
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