USD/JPY and JPY crosses traded soggy for the most part, down hard early and gradually regaining poise. Sell-offs in various JPY crosses overnight as well as in USD/JPY helped set the tone. The well-read "Position" column in today's Nikkei Financial also helped. It tipped a change in MoF's FX stance and that Japanese officials no longer wanted more yen weakness.
Talk also that former-EcoMin Takenaka called for a 50 bp BoJ interest rate hike this year also made the rounds. Upon confirmation, it seems he meant 50 bps this fiscal year which runs to March, matching market expectations. Some extrapolated a 50 bp move in August. With Mr Takenaka also seeing deflation into "08, such a hawkish view seems unjustified.
Whatever the case, JPY was bought back with dealers noting one large semi-governmental investor leading the foray. USD/JPY traded down from 123.71 to 123.34 before bouncing to 123.40-50. Bids are thick from 123.30, offers from 123.80. EUR/JPY sold off from 166.57 to 166.00 before bouncing to 166.20-30. AUD/JPY traded 104.35-77, NZD/JPY 94.35-72 and GBP/JPY 246.50-247.10, and look to close mid-range.
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