USD/JPY remains trapped in a 119.50-120.50 range. Asia saw the pair trade up early on the back of Japanese importer settlement demand going into the Tokyo fix and a more hawkish-than-expected Fed overnight. It traded up to 120.24 early before easing off. Helping the pair to move back down was a rash of offers from Japanese exporter and option players ahead of barriers at 120.50.
There was also talk of residual repatriation flows from a semi-governmental entity ahead of large US coupon payments on the 15th. Bids returned below 120.00 however with the downside limited to 119.95. EUR/JPY traded similarly, up to 162.74 early before easing to 162.35. Although some apprehension can still be felt ahead of tonight's ECB rate decision (no change) and ECB President Trichet's press conference (to signal a hike in June), dealers see the cross well bid around 162.00 and maybe poised to trade higher.
Purchases below the Ichimoku tenkan line, today at 162.76, have proved profitable since mid-March. AUD/JPY traded up on the back of strong jobs data, from 99.34 to 99.88. Profit-takers look to cap it around 100.00 for now.
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