USD/JPY rose in Asia on the back of pre-holiday Japanese importer settlement demand at the Tokyo fix and general USD strength. US and other model funds were good buyers of USD in a number of pairs. This demand helped push USD/JPY above 120.00 for the first time since February 27 and take out option barriers there, some tipped to be expiring today.
Stops were set off, taking it up to as high as 120.15 before profit-takes and Japanese exporter sales pushed it back a bit. London came in at 119.60-65 and quickly pushed the USD back into bull mode. Price recorded new highs at 120.25, option barriers were touted at the level but the jury is out on whether they have been removed. Exporter offers trailing up to 121.00+ should provide considerable headwind.
However, USD looks bid and the February 27 high of 120.75 could be tested soon. EUR/JPY and other JPY crosses remain resilient, edging higher through London with the downside seen limited. Very low interest rates in Japan for months to come will help keep the yen pressured vs the Dollar and on the crosses.
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