Opened in early Europe around Y79.43 and Y99.92, USD/JPY was trading modestly lower during Asian trade, although off the lows seen earlier in the session. The pair rallied into the Asian open, helped by fresh safe-haven flows as Moody’s became the latest ratings agency to downgrade Spain. The pair touched a low at Y79.30, before rallying to Y79.48 in Sydney trade. The pair opened in Tokyo at Y79.45, slipping into the fix to retest the lows, but bouncing off of Y79.32 as trading desks again eyed the possibility of intervention from Japanese authorities as jawboning continues. The pair was, however, confined to a narrow Y79.32 to Y79.48 range. EUR/JPY challenged Y100.00 – testing reported offers layered from Y100.00 to Wednesday’s Y100.10 high before it eased through the Tokyo fix on light selling. EUR/JPY tracked EUR/USD slippage through the European morning, the rate pressing below the overnight base at Y99.64 to Y99.50, the move taking USD/JPY to extended lows of Y79.22. Yen was basically sideline through Europe with direction provided by cross plays and EUR/USD.
EasyForexNews Research Team