Despite the USD/JPY topside dominating the morning session in London, a good supply of liquidity both sides of the market has kept the pair from surging away. The stops initially triggered at 117.50 have so far only managed to spike a high of 117.62 falling short of an expected 117.80 test.
Unless any major surprise is sprung at the BOJ Policy meeting, range plays are likely to hold intact. Maximum risk in the short term would suggest a spike towards 118.40 although any possible move towards this level should be countered by domestic sellers who continue to repatriate aspects of overseas holdings before term end.
Volatilities have remained static with another day of widespread expiries coming off. The main source of interest would still surround a suspected 116.00 barrier which would make Asia"s bounce from 116.26 more credible in terms of defensive bids.
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