JPY is mid-range after good buying interest in early European trade. USD/JPY fell amid selling via the JPY crosses. The pair gave up the 118.00 handle amid GBP/JPY and EUR/JPY sales after exporter offers and option names capped gains. This encouraged speculative accounts and some recent longs to book profits after failure to sustain 118.00.
Directional bias was mixed, with carry trade interest not as prominent as earlier on in the year, while stabilisation in global equities reduced the overall demand for JPY. Flight to yield and interest relating to investment trust launches should offset some of the anticipated Japanese fiscal year-end flows and leave a small topside bias despite today's small correction. EUR/JPY sees similar price action, recovering from 156.40 to trade back into 156.75.
The topside should be capped by today's Bund coupon and redemption payments, yet custodial name and trust bank interest should alleviate any sustained downward pressure. Talk of very large uridashi issuance next week is restricting JPY rallies and with investor risk appetite at increased levels JPY-funded positions should continue.
No comments:
Post a Comment