Dollar-yen closed in NY at Y87.05, having seen a corrective pullback through the NY session that had taken it to lows of Y86.90. Rate retested NY recovery highs of Y87.12 before turning lower with stops below Y86.90 targeted and triggered before rate based at Y86.83. As rate touched lows so chat emerged that there is a Y86.75-90.75 DNT option structure in the market (expiry week of Mar4-7), the base of which expected to draw protective demand ahead. Rate reversed higher with recovery boosted as Japanese banks showed strong demand from around the Y86.90 area to take rate on to Y87.21 into the Tokyo fix as talk swirled that decent sized RHS interest would be seen. Rate slightly dipped back post fix only to meet fresh demand that took rate on to Y87.55, the move this time driven by euro-yen as stops through Y114.35 were triggered, with US custodial demand for dollar-yen also recorded in the move. Dollar-yen offers seen into Y87.60, more at Y87.80. Support Y87.20, more toward Y87.00 with stronger interest now seen at Y86.85/75.
EasyForexNews Research Team