On balance, USD/JPY remains in the recent range around 118.20-119.00/10, dropping back to 118.45/50 on the soft US housing data. However, dealers note that the USD/JPY feels heavy this afternoon, with the stall in JPY cross gains this morning weighing on USD/JPY. EUR/JPY has been unable to break above 162.00 and trades at 161.78 now, helping to weigh on USD/JPY.
Smallish intraday stops are eyed under 118.40 this morning but buyers remain at 118.20/25 on a push lower. Traders report some small interest in short-dated USD puts this morning and this is helping to weigh on USD/JPY as well. Data overnight was certainly supportive for the JPY with the March trade surplus rising to a record high of Y1.633 tln, up 73.9% on the year.
The surplus for the US was up to Y9,096 bln, the second largest ever largely due to auto exports which should get U.S. congressional representatives focusing on the weak JPY again. China has now become Japan's largest trading partner, surpassing the US for the first time since WW II.
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