The strong recovery in yen pairs seen through the Thursday’s NY session continued into Asia, dollar-yen quick to move above the NY high at Y90.56, the move picking up decent momentum as stops were triggered above to take rate on to Y90.69. Momentum faded on approach to Y90.70 with market reminded that there is a Y86.75-90.75 DNT option structure in play, expires first week of March. Protective selling prevented the trigger and prompted short term specs to cover back/take profit. Rate touched a low of Y90.29 before picking up fresh demand, traders noting Gotobi day demand into the Tokyo fix which edged rate back to Y90.60. A brief easing to Y90.42 attracted late buying which took rate above Y90.60 into the European open. Euro-yen tracked dollar-yen moves, extending its recovery to Y121.31 before it pulled back to Y120.67 then settled around Y121.00 ahead of the Europe open. ECB LTRO repayment announcement at 1100GMT to provide the morning’s interest, the market seen positioned for a repayment amount of between E100-150bln. (aove likely to provide the euro with a further boost, below and long euro positions expected to be flushed. If as expected we could see an initial blip higher before profit take selling emerges.
EasyForexNews Research Team