Friday’s risk on recovery post US jobs data, which had seen dollar-yen dip to Y87.60 on the initial react (prompted by softer US yields) before rallying back to Y88.37, then closing at Y88.15, moved across to early Asian trade Monday allowing rate to edge back up to Y88.38. Euro-yen extended its recovery off post US jobs lows of Y114.28 in early Asia (NY close Y115.19, recovery high Y115.42) to Y115.56. This early trend reversed at the Tokyo fix as sellers emerged, with comments from FinMin Aso that as long as there is communication between the govt and the BOJ there was no need for a formal policy accord added further weight. Japan Softbank shares then tumbled as market reacted to a Friday report putting their acquisition of Sprint Nextel in jeopardy which bruised the risk tone and led dollar-yen to make a show under Y88.00. Euro-yen gapped through Y115.30 to Y114.80 before both pairs met importer demand interest. Recovery efforts were capped at Y88.18 and Y115.15 before Japanese corporates sold back into the move taking dollar-yen to Y87.69/euro-yen to Y114.31 as stops through Y114.50 were triggered. Rates hold heavy into Europe. Bids seen into Y87.50, some stops below. Offers remain into Y88.50.
EasyForexNews Research Team