Dollar-yen and yen pairs gapped higher into the Asian open Monday as traders reacted to weekend press reports that suggested that current ADB Kuroda was seen as a front runner for the BOJ Governorship, with Iwata seen as one of the deputies. These two men are seen as favouring aggressive monetary easing, though their appointments are seen needing support in the Japan upper house, where the ruling LDP does not hold a majority. Dollar-yen closed in NY at Y93.42, gapping at the Asia open to Y93.89 before extending its rise to Y94.77, after breaking recently posted highs at Y94.46 (Feb11). Euro-yen closed NY at Y123.22, gapped to Y123.90 before it too extended gains to Y125.37. Both rallies met stiff resistance from retail and Japanese exporters which countered the extended reaction, with dollar-yen easing to Y93.97, euro-yen to Y123.90 as the weight of these sales managed to overcome reported macro demand. Traders suggest that yen is expected to remain soft but also note that any approach to Y95.00 expected to meet strong option related selling linked to large barrier interest here. Tech traders also note that yen pairs have gaps to fill from the NY close/Asia open.
EasyForexNews Research Team