USD/JPY extends Asian gains to trade through 120.50/60 offers and stops above to record a 120.63 session high. Broad JPY losses have been behind the flows, with speculative accounts and momentum funds pushing through modest amounts. Good real money interest and importer demand was noted in the low 120's and this encouraged speculative account activity.
The G7 meeting has predictably left a choppy tone in the market. Yesterday's remarks from US Treasury Secretary Paulson played down the emphasis on JPY aheadof the meeting, which has also added to the JPY heaviness in the European morning. A marked shift in sentiment ahead of the meeting though is not to be expected, with positioning expected to be kept to a minimum ahead of the weekend.
As a result, exporter offers and proprietary name selling should offset some of the early morning vigor in USD/JPY price action.Offers are noted from 120.65/70 from proprietary names and CTAs, while exportershave larger size interest coming in at 120.80 up to 121.00.
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