A quiet European session and a reluctance to extend JPY shorts ahead of the Tankan report clipped JPY losses. USD/JPY drifted lower early amid good selling from a Japanese securities house and a clearer. The pair fell from 117.65 but was supported around 117.25/30 due to options support and standing bid interest from real money names and importers.
Upside momentum waned due to corrective price action in the JPY crosses. AUD/JPY experienced profit taking and EUR/JPY also saw decent selling after two failed attempts on 155.50. The cross drifted inside the 155.00-50 range, while USD/JPY hovered around the mid 117's. Option strikes may influence amid a slew of 155.00 interest in EUR/JPY and 116.80-117.45 USD/JPY strikes over the next couple of sessions.
Investment trust demand should provide a supportive backdrop for USD/JPY and EUR/JPY going forward, with a wave of launches due over the next week and into the New Year. A strong Tankan release could offer the potential for a correction before the uptrend gathers fresh momentum. However, it is widely expected that Japanese rates will remain on hold even with a strong reading.
No comments:
Post a Comment