From a low of 120.00 in Asia and a late high around 120.50, USD/JPY traded on toa high of 120.82 in New York overnight. It has come down a bit since on the backof easier US interest rates but remains buoyant with dealers noting that JPY buy-backs ahead of the weekend G7 meeting have subsided.
If there is no mention of JPY in the G7 communique, players seem ready to sell JPY again, perhaps taking it back above 121.00 early next week. In the meantime, offers from mediumterm longs still looking to pare back positions are seen from the 120.80-90 level, and look to trail higher up to 121.00 and above. Japanese exporters are likely to have some USD to go up top, mostly residuals for the fiscal year to end in March.
Toyota upped its assumed USD/JPY rate for the current fiscal year to 116 from 115 and stands to reap large windfall profits from the exchange rateeven at current levels. Other exporters will likely see the same. Support below is seen just below in the 120.50-60 level, previous resistance and 120.53 the low in New York overnight. London saw a low of 120.36. USD/JPY currently trades 120.62/65.
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