USD/JPY showed some bounce in Asia today, trading up from an early low of 115.10 to as high as the 115.80 level. The pair traded down to as low as 114.97 on Friday, effectively taking out option barriers at 115.00. However, there was little follow-through with dealers citing more option-related bids ahead of more barriers tipped at 114.90.
USD/JPY has since traded higher on a mix of short-covering and demand from a variety of players including Japanese importers and some institutional investors. Some light stops were tripped on the break above 115.60 but more offers are seen up towards 116.00 from exporters and other players looking to sell into USD rallies. USD is likely to remain under pressure across the board going forward on recently weaker fundamentals, and this should limit the USD/JPY upside. EUR/JPY and other JPY crosses remain essentially bid.
EUR/JPY traded up with USD/JPY today, breaking through Friday's 154.11 record high to a marginally higher 154.15/20. Many eye moves towards 160.00 near-term on general EUR strength. Profit-taking/retracement after the already discounted ECB hike Thursday could be minimal.
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