Yen continued to trade with an underlying soft tone through Asia, with dollar-yen able to extend its recovery off Thursday pullback lows of Y83.25, with the break above the Y83.75/85 area clearing out barrier interest and tripping stops, to take rate on to Y83.96. Japanese demand at the Tokyo fix provided the main upside drive, but decent supply ahead of the next barrier at Y84.00 proved strong enough to counter and allow rate to ease back to Y83.75 into early Europe. The recovery in euro-dollar and the soft yen allowed euro-yen to extend recent gains to Y109.98, just missing out on challenging the Y110.00 level with reported option linked offers ahead of a barrier here able to counter. This rate trades back around Y109.70 into Europe. Offers have been reported between Y110.00/200 , a break to open a move toward Y110.50/65. Elections in Japan on Sunday with forecasts suggesting the LDP may draw enough votes to form a government on their own. LDP Abe comments of late about the BOJ and the level of the yen seen adding to the negative yen weight.
EasyForexNews Research Team