The pair was tied to a narrow Y94.80-95.00 range for the majority of the session before climbing to Y95.22 after a G8 statement that endorsed Japanese policy in the short term. With lack of follow through the rate drifted back, before gapping to session lows of Y94.28. The move seen by some on large hedge fund sales in thin markets, others suggested the FT article that claimed Ben Bernanke was likely to signal a tapering move, wasn’t a leak from the Fed, merely the reporters view. Euro-yen closed in NY at Y126.45 having recovered off pullback lows of Y126.13 after earlier printing a high of Y126.92. Dollar-yen opened heavy and slipped from an opening Y94.73 to Y94.43 on continued reaction to late moves in the US session. Support in the dip cushioned and as risk appetite increased, broad dollar strength was seen through the Tokyo fix with the rate extending gains to Y94.95. Japanese bank supply capped ahead of Y95.00 and the rate stalled to settle in a very tight Y94.70/90 range as traders squared positions ahead of the Fed on Wednesday. Euro-yen tracked dollar moves, the rate bouncing off early lows of Y126.21 to Y126.85, before easing to settle around Y126.50/60.
