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USD/JPY Extends Recovery but Meets Headwinds into Y111.00

JPY
MNI (London)
  • Strong USD seen at Tokyo fixes provided the lift to take rate up to Y110.97 but move again met decent resistance ahead of the next big figure (similar happened Tuesday ahead of Y110.00).
  • Failure to push through the figure saw rate ease off to Y110.82 but was seen picking up fresh demand interest in Europe, rate currently trading back above Y110.90.
  • UST yields, month/quarter/FY-end flow continue to be cited for the move, with some adding in the announcement of Japan Hitachi to acquire US software developer GlobalLogic in a deal worth $9.6bln.
  • The stalling ahead of Y111.00 again prompts suggestions of option barrier interest (no confirmation), a break here to expose Y111.40/50 (Y111.55 topside 2.0% 10-dma envelope) ahead of Y111.70. Option barrier interest likely to be larger at Y112.00.
  • Support Y110.65, Y110.50/40, stronger between Y110.00-109.90.
  • MNI Techs: USDJPY continues to push higher with the bull trend firmly intact. The move last week above 109.36, Mar 15 high confirmed a resumption of the uptrend and note, 109.56 has been breached, a key retracement - 76.4% of the Mar 2020 - Jan down leg. Tuesday's move above 110.00 opens 111.30, Mar 26, 2020 high. Overbought conditions are still not impacting this trend and instead continues to reinforce current sentiment. 108.41 is key support.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com

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