The pair started the new year continuing with recent weakness in thin trading conditions, as markets in Tokyo remained closed for the rest of the week. Dollar-yen opened at Y105.25 after trading a fresh 5-year high of Y105.47 on New Year’s Day while euro-yen opened at Y144.84 and then briefly went up to a Y145.13 high. Dollar-yen also inched up in early dealings to Y105.41 but failed to make further ground above that as trade flows dwindled. The move also reportedly stalled ahead of rumored barriers at Y105.50 andY106.00, according to dealers. Dollar-yen retreated after Asian markets got underway, with many of the region’s main stock market indexes slipping in initial trades. Euro-yen also gave up most of its early gains and slipped back below Y145.00 to a low of Y144.80. Dollar-yen retreated further to a Y105.24 low before talk of bids from below Y105.30 supported the downside while euro-yen was held near Y144.90. Dollar-yen edged up a few notches in the early afternoon and was last at Y105.28 while the cross traded at Y144.73. Overall, dollar-yen is seen needing a move below the 21-day moving average at Y103.90 to counter current bullish aspirations and hint at a deeper correction targeting Y101.62.
