USD/JPY and most of the JPY crosses traded on a supportive footing after making modest gains in late Asia. JPY was weighed on byremarks from BOJ's Haru. He expressed the virtues of a weaker JPY, which prompted good selling from speculative accounts. USD/JPY traded from 120.80 and up through 121.00.
Follow through demand from model funds and momentum accounts eventually took out 121.20 offers and stops above 121.25. The pair was unable toovercome offers at 121.30 from exporters and a supranational account. EUR/JPY started the session on a bid tone at 157.80 but met good US investment house selling, which sent the pair back into 157.20. Real money demand and proprietarybased interest helped the pair back into the 157.50 area ahead of the North American open.
The market remains focused on today's ECB and the start of the G8meeting. Despite talk of a possible ECB pause after a March interest rate hike, dealers seem to be focusing on hawkish comments from ECB president Trichet and possible remarks on JPY. The G7 meeting while a risk is not expected to specifically target JPY as European officials struggle for wider support.
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