USD/JPY remained very much bid in Asia, holding in a 121.40-57 range and not far from the 121.63 high seen overnight. Offers remain topside ahead of option barriers at 121.75 and 122.00 and also from Japanese exporters but the bias looks to remain up with USD still generally bid and specs looking to push the market above 122.00 and 122.20, the spike high on January 29 and high of the year.
A break above would be very bullish technically, perhaps taking USD/JPY up as high as the 125-126 level, highs not seen since December '02. Such a move would immediately target more option barriers tipped at 122.50, 123.00 and more trailing up to 127.00. Bids remain thick below ahead of large Japanese importer settlement at month-end, more investment trust launches this week and next (some Y200 bln or so is seen this week) and a rash of samurai launches totaling some Y100 bln near term.
Importers in particular may be forced to pay up. EUR/JPY and other JPY crosses remain better offered on the back of shifts in carry trade plays favoring LATAM and CAD but remain essentially bid on dips. EUR/JPY is heavy ahead of 164.00 option barriers.
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