JPY consolidated after broad demand in Asia. USD/JPY traded towards 120.00 but was unable to sustain these gains amid good demand from a quasi-official name. This fueled profit taking in the European session. The pair tested the topside but met good selling interest from 120.50/55. Japanese names were good sellers on behalf of system accounts and model funds.
AUK clearer and a US investment house were also noted to have an interest and this soaked up demand from a trust bank in the 120.30's and 120.20. Option triggers at 120.00 limited the extent of JPY gains . Elsewhere, EUR/JPY traded on a supportive footing after bouncing out of 155.25. The pair traded through 155.50 and 155.60 offers to test 156.00. Japanese offers capped gains and the pair drifted lower amid good speculative account selling.
Japanese real money bids supported the pair, leaving narrow European trading ranges. Bias for both pairs is expected to remain on the downside, with pre-G7 position adjustment andrisk reduction underpinning JPY. USD/JPY 120.00 and 119.80 triggers are pivotal,while EUR/JPY also sees good interest between 155.25 and 155.00.
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