JPY was mixed in the European morning. A stream of strong European data releases set the tone. This saw EUR/JPY break higher after opening the European session at 157.45. The pair extended gains after stops weretriggered through 157.70 on the way up to a 158.06 session high. Selling was noted from real money names and exporters.
Forthcoming Euro Zone redemption payments saw steady selling, which helped to reduce volatility and keep the pairin a narrow range. The pair drifted between 157.70 and 157.85 for a large part of the European morning. USD/JPY was unable to make much headway, trading sideways early on and then turning lower on Japanese selling. Some interest was linked to US coupon payments due on February 15th.
The downside found support ahead of 121.20 stops, leaving a relatively stable feel into the North American open. Near-term bias is a little mixed after JPY shorts got caught out in Asia yesterday. Carry trade interest has been mild since the G7 meeting, which has reduced activity. Price action will be driven by Thursday's Japanese GDP release, particularly with the BOJ policy meeting due on February 20-21.
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