USD/JPY is off the overnight highs of 117.63 and trades at 117.27 currently, easing slightly this morning as traders pare overnight longs. Bids are tipped as close as 117.10 now with further buying interest clustered around 116.80/90. Gains overnight took the market by surprise given the continued interest to repatriate ahead of the fiscal year end and in the wake of the China rate hike.
However, fresh carry trade interest is dominating with AUD/JPY, NZD/JPY and GBP/JPY buying seen overnight and with Japanese retail investors still showing heavy appetite for these trades. Offers remain above 117.60 but with stops reported above 117.85.
Japanese cash rates have edged up overnight on fiscal year demand but this appears to be having little impact on JPY with expectations of dovish comments from BOJ Fukui this evening, after the BOJ policy meeting, helping to underpin USD/JPY.
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