Tight ranges were a feature overnight with Asian central banks reportedly playing the 120.00 to 120.35 band. Trading conditions were thin and there was reportedly a lack of Japanese corporate interest. The view among local players is that some significant hedging activity passed through the market last week and that this looks to have cleared the order boards.
People are hearing of patchy exporter interest in the 120.40-50 area and also reports of importer bids close to 120.00. There are also rumours that a leading Asian player has a very short term option strangle play on board with an upside level at 120.50. The Yen drew some support from higher than expected Japanese wholesale prices for April but the move proved short lived and with the "carry trade" looking to be back on the Yen is trading towards the bottom of its Monday range.
Much is being made of tomorrow's reportedly sizeable U.S coupon and bond redemption proceeds although the market has a habit of over factoring the likely impact of the repatriation flows, if any.
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