Opened at Y80.86/106.27 after Y80.60/94 and Y105.47/106.35 overnight ranges. Talk of semi-official demand had underpinned the dollar overnight and better tone of risk assets allowed yen to relinquish some of its strong Tuesday gains. That tone continued in early US dealings though dollar held shy of offers clustered around Y81.00 even as firmer tone of EUR lifted cross to Y106.20 before momentum faltered. With US yields firming, USD punched through Y81.00 around the option expiry hour, gunning stops above Y81.05 in a move that stalled at Y81.128, EUR/JPY spiking to Y106.70 around the same time as stops were flushed above Y106.50. Both deflated slowly from there, dollar returning to Y80.80 ahead of the London close while EUR returned to Y106.00. USD lifted to Y81.05 in early afternoon as EUR/JPY returned to Y106.20 but both pairs deflated slightly after Fed Beige Book, drifting to Y80.90/106.00. Late dealings saw dollar at Y80.89 and euro at Y105.96, near its 200d ma at Y105.92.
EasyForexNews Research Team