Yen remained under pressure into early Asian dealing with dollar-yen able to extend the post ECB Draghi rally from its NY close at Y96.36 (session high Y96.42) to bring pressure to bear on the reported barrier level at Y97.00. Traders had been made aware that large Y97.00 strikes had been bought Thursday for Monday expiry. The initial break took rate to Y97.06, but this move met strong take profit sell interest that eased rate back to Y96.64. Option gamma demand cushioned the move and allowed for another assault on the Y97.00 level, this time taking the rate on to highs of Y97.19 where it met option linked offers placed into Y97.20. Euro-yen moved higher in tandem, extended its recovery highs to Y125.60 off NY closing level of Y124.61. The post BOJ euphoria stalled with the Nikkei and JGB’s stalling before turning sharply lower prompting a quick move back into the yen. Dollar-yen dropped to fresh intraday lows of Y96.14, while the cross dropped to Y124.38. Traders have suggested that the Japanese market were looking for further operations from the BOJ but none forthcoming the market was quick to turn tail and cover back.
EasyForexNews Research Team