USD/JPY and JPY crosses have traded down again but the downside has again met with bids coming out of the woodwork at the lower levels. Despite mini-rebounds, the bias looks to remain to the downside. It is nearing month-end and fiscal year end for many US funds, and long liquidation looks to be a major theme. The same large Japanese semi-official entity which sold USD and other JPY pairs yesterday was back in overnight, pushing USD/JPY and crosses lower.
Into London and USD/JPY fell from levels around 122.85 to 122.35 before bouncing. EUR/JPY fell from 165.20 to 164.27 and as with the spot market has settled into a bout of consolidation. Into the London midday. USD has seen good bids from Japanese importers, option players and retail investors but the weight remains with the bears.
More bids are seen down to key support at 122.00-10 and 122.50 and 123.00 option strikes roll off later today, which could have some impact. Technically not a classic reversal but failure to hold last Friday's 124.16 high and subsequent 123.86 close set up a change in direction and with strong confirmation seen Monday/Tuesday the charts are now pointing to 122.00.
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