Two distinct moves overnight and into Europe with more reserve talk out of China boosting the Yen to 117.75 vs the Dollar and then a short covering in USD/JPY once the BOJ news had worked its way through the market. Early Asian highs of 118.10, a drop to 117.75 and then a rebound to 118.15 as Europe picks up the reins.
A squeeze to 118.30 tested China and option related offers and the resulting pullback took the USD back under 118.00. No change from the BOJ, as expected and slightly less hawkish than expected tone from the bank's Governor, Fukui. The BoJ Governor reiterated his recent stance that the BoJ will continue to act accordingly in line with economic and inflation data and that he has no pre-set schedule for hiking interest rates.
With the market already discounting a rate hike in either December or January, the point seems a bit moot to some Tokyo players. The China news on closer inspection is nothing new but their Yen purchases will no doubt stall any topside runs in USD/JPY this session. The Offers in the 118.30-50 area are rumoured to be Chinese.
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