Profit taking by JPY shorts has influenced price action in USD/JPY. EUR/JPY's inability to recapture the 156.40 high and a good supply of offers in GBP/JPY has fueled speculative JPY demand. The names behind the interest are not very prominent, with a number of medium-sized accounts and interbank names driving sentiment. The interest has conspired against USD/JPY, which was already struggling to reassert itself on yesterday's 118.35 high.
In the absence of large flows option interest has reportedly had an impact, with 118.10 and 117.40 open interest noted. Japanese demand on dips remains a supportive factor, along with technical significance at 117.95. So far, prices have been unable to break back inside the Ichimoku cloud and this has encouraged long plays. 117.95 is the Ichimoku cloud top and 117.45 is daily support from December 15th low.
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