The pair closed Monday’s holiday thinned session at Y98.66 after rate had recovered off an earlier low of Y98.10 as the dollar was given a boost by positive comments out of the US suggesting a deal on the US debt ceiling was close. A returning Tokyo market saw importer demand into the Tokyo fix lift the recovery on to Y98.70, with move also seen in line with an early lift in the Nikkei, before momentum faded. After the fix this demand eased and dollar-yen eased to an initial low of Y98.45, popped back above Y98.50 only to turn lower again to extend the corrective pullback to Y98.42 into the European open. The Nikkei tracked the pullback, driven by reported profit take sales. Offers remain in place to Y98.70 with talk of model stops placed between Y98.70-90 but any triggering expected to meet stronger exporter sell interest placed into Y99.00. Traders also mention that large option expiries at Y98.75 and Y99.00 could also act to provide an upside counter until after the run off. Traders have noted ongoing importer demand seen into the pullback with rate currently cushioned ahead of Y98.40.
