The cross closed in NY at Y99.30 after rate had been able to recover off lows at Y98.985 to Y99.50 before slipping back into the close. Early demand into Asia took rate up to Y99.42 but move quickly saw momentum fade with the reversal lower seen driven by macro profit take sales. The move lower gained momentum as weaker longs were squeezed, the break back under Y99.00 taking the rate to early lows of Y98.58 before importer demand allowed it to bounce back above the figure. Rate settled back between Y99.00/10 into the BOJ policy announcement. No change confirmed with attention now seen on the inflation statement at 0600GMT, followed by the Kuroda news conference after 0715GMT. Dollar-yen came under another round of sell pressure, some linked to dollar positioning ahead of this afternoon’s US Q1 GDP, with the recent failure to take out the Y100.00 prompting some to pare back dollar longs. Large stops below Y98.50 were targeted and triggered to take rate on to extended lows of Y98.22, though traders reported Asian sovereign demand interest which cushioned the move and has allowed rate to recover above Y98.50 at writing. If US GDP disappoints will leave dollar-yen longs exposed, with levels at Y97.50 and Y95.50 mentioned.
EasyForexNews Research Team