The pair sank to another 6-year low against the dollar this morning, on follow-through dollar-yen gains after last night’s FOMC decision. Dollar-yen opened at Y108.38 today and went up to Y108.54 in very early dealings. The move through the US high of Y108.39 set the stage for further dollar-yen gains and it rallied off Y108.44 to trade an eventual high of Y108.69 even before Japanese stocks had opened. That marked the highest level for the pair since it traded Y109.08 on September 8, 2008. The move however began to fizzle out amid profit-taking interest, and dollar-yen slipped back towardY108.35 about 30 minutes after the start of the Japanese stock market. Dollar-yen found renewed demand off that, carrying the pair back to Y108.60 and then to Y108.64 although again the momentum for further gains is lacking, with dollar-yen seen struggling to extend gains beyond this morning’s highs. Dollar-yen was last at Y108.68. The rally that commenced in August is now focused on the Aug 2008 high at Y110.68. The Y107.39 level now becomes key support with a close below to ease the bullish pressure a little.
