JPY losses accelerated after BOJ Governor Fukui offered little on future hikes. He said there was no predetermined timing for a rate hike encouraging broad based JPY selling. The JPY lost ground against GBP, AUD, NZD, EUR and the USD. USD/JPY immediately breached 121.00 at the start of the European session and extended higher.
Buying was noted from speculative accounts, real money names and leverage funds. The pair traded into 121.30 and experienced very good two-way action before moving up to a 121.45 high. The pair slipped back into the 121.25/30 area, yet remained bid throughout. EUR/JPY saw a similar theme, extending to 157.37. An overhang of Japanese offers coupled with sizeable USD/JPY supply at 121.45 capped EUR/JPY gains. Profit takers moved in, with one UK name selling in good size.
A US name on behalf of a fund was a good buyer ahead of 157.00 and this kept the pair bid ahead of the US session. GBP/JPY also pushed higher, yet topped out ahead of large size 240.00 stops. Crosses are to be expected and USD/JPY to trade on the firmer side in the near-term, with BOJ policy bias encouraging further JPY-funded positioning.
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