USD/JPY and JPY crosses looked relatively bid in Asia despite general USD weakness Friday following more comments relating to reserve diversification from China Friday and talk in some quarters of paring of JPY carry trades. USD/JPY did move down to a fresh low of 115.40 in early Sydney trading but has since bounced towards 116.00.
Bids at 115.40 were thick and more were tipped from a variety of players below including Japanese importers, institutional investors (private and semi-official) and US hedge funds looking to pare down outstanding USD-short positions before their fiscal year-ends. Option players are probably part of this mix, especially towards large barriers tipped at 115.00. Offering interest remain at and above 116.00 from specs still eyeing more downside.
EUR/JPY shot up above its New York/London high of 151.75 and through presumed option barriers at 152.00 early in Sydney, trading up to as high as 152.40/45 before retracing lower. CB reserve diversification and surging EZ bond markets should keep this cross moving higher. Position adjustments in AUD/JPY and NZD/JPY look to be over for now.
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