Opened in early Europe at Y78.87 and Y100.02, opened in Asia at Y79.00 and headed higher on reported hedge fund demand to Y79.12. USD was unable to maintain gains and slipped after the Tokyo fix to Y78.79, later nudging higher to Y78.85 as market
players await the outcome of the Fed’s FOMC. Expectations are for a further easing from the Fed, possibly in the form of an extended “twist” operation. The cross tracked USD/JPY and slipped to Y99.81 after the fix with recovery attempts seen shallow. Traders reported of Japanese hedging activity on upticks and the pair settled around Y99.95. Into Europe and USD/JPY continued in a tight Y78.82-99 range, grinding to session lows before tracking strong cross yen demand and recovering to Y78.95 ahead of NY. Early demand in EUR/JPY lifted through Y100 to Y100.21, but the rally stalled and pared back gains to Y99.90. Demand met in the dip and a strong recovery in EUR/USD dragged the cross to Y100.10, rate extended gains to Y100.34, later easing on profit take sales to close on a more buoyant tone than of late.
EasyForexNews Research Team