Opened in Asia this morning at Y81.49 and headed higher into the Tokyo fix on rumoured Japanese pension fund demand to highs of Y81.86. The USD later pared back to opening levels after the BOJ left rates and asset purchasing unchanged which prompted a round of EUR/JPY and AUD/JPY sales. EUR/JPY pushed up from Y106.80 to Y107.45 assisted by strong Chinese trade data and EUR/USD demand from a UK bank, before slipping back to Y106.55. Into Europe, cross sales continued to weigh on USD/JPY and the pair slipped to Y81.06 lows, before running into technical support and aided by some profit take demand lifted back to Y81.25. Trade was then contained in a tight range and dollar closed the morning around Y81.20. EUR/JPY tracked EUR/USD in early dealings and slipped sharply through Y106.00 to Y105.97 lows, flushing stops on the move. Dip buying emerged and the cross bounced to Y106.40, but any recovery attempts were seen shallow. Further supply pressed the rate to Y106.10, later climbing to Y106.25, however the tone remains heavy.
EasyForexNews Research Team