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Holds Below Y109.00. Focus on US CPI, 10-yr US note Auction.

JPY
MNI (London)
  • USD/JPY recovery extended to Y109.23 into the European session Tuesday before an easing in UST yields prompted a sharp corrective pullback which saw rate ease to Y108.56.
  • Rate recovered to Y108.97 in early NY before turning south again, touched a low of Y108.42 before closing around Y108.50.
  • Rate edged up to Y108.69 in early Asia, Japanese retail sector suggested to have covered recently opened shorts, with some positioning long for Goto-bi day fix. However, fix supply eased rate back to Y108.52 before a rise in UST yields countered and took rate up to Y108.92.
  • UST yields remain the key driver of direction, via USD strength. With this in mind note the US 10-yr note auction at 1800GMT (recent poor 7-yr in mind prompted a sharp rise in UST yields). 30-yr auction Thursday.
  • US CPI provides the data focus at 1330GMT.
  • Support Y108.42/35, stronger Y108.10/00. Resistance seen back in place around Y109.00, a break to expose yesterday's high of Y109.23 ahead of Y109.56(76.4% Y111.71-102.59).
  • MNI Techs: The USDJPY outlook remains bullish despite the modest pullback Tuesday. The pair is once again approaching the 109.00 handle and attention is on yesterday's higher 109.23. Clearance of this level would confirm a resumption of the uptrend with scope for 109.56, a key retracement level. Momentum studies are in overbought territory however this is not having an impact and instead reinforces the bullish sentiment. Support is at 107.82, Mar 5 low.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets

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