JPY continued to lose ground in the European morning session. The JPY crosses led movement; EUR/JPY pushed higher amid good demand from a US name and a Swiss account into the European session. Good investment trust demand was cited, with Japanese accounts and offshore name behind the flows.
EUR/JPY pushed up to 157.65 from the low 157's in Asia, while GBP/JPY once again traded above the 240.00 handle to a high 240.39. USD/JPY moved through 121.50 and triggered to stops to record a 121.69 high. Exporter selling was noted from 121.65 and these capped for a short while, along with option related interest. Focus remains on the 122.00 option triggers, although there is considerable interest to emerge ahead amid heavy order flows from Japanese corporates and option names.
The bias remains up but there has been a lack of momentum amid overstretched positions in the JPY crosses and USD/JPY. The market is poised for a pick-up in official FX rhetoric into the World Economic Forum in Davos, this Wednesday. Elsewhere, options interest is noted at 121.75 and 122.00 today and EUR/JPY sees option supply at 158.00.
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