USD/JPY did very little overnight, holding in a tight 119.85-120.12 range during the course of the New York day. No fireworks were seen in London-less European trading either. The focus looks to be well away from JPY pairs with M&A action elsewhere and stock market rallies taking the spotlight. This likely to continue to be the case, USD/JPY looks set to see another range trade.
At 120.06/09, the pair remains bracketed by offers above from the 120.20-30 level and trailing up to option barriers at 120.50 and above. Stops are seen above 120.80 but more offers from Japanese exporters are likely above. To the downside, bidding interest remains from the 119.80 area down towards 119.50. Various players are tipped below, including Japanese institutional investors, including life insurers and semi-governmental entities, as well as importers looking to buy into dips.
In an interesting footnote, some foreign players look to be better JPY buyers than sellers. A number are seen net short Japanese stocks, and have to buy back ahead of month-end. Moves out of some carry trades may be seen as JPY is bought back in this regard.
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