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USD/JPY Inches to New Highs, Narrows Gap with Cycle Best

JPY
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  • USD/JPY shows just above the overnight highs to print again the best levels of the day and narrow in on the cycle high at 154.79.
  • Activity so far Monday is on the muted end of the scale, with cumulative JPY futures volumes around 25% below average for this time of day - potentially indicating a lack of participation on the recovery off 154.60.
  • JPY selling in the crosses also contributing as AUD, NZD sit firmer on the session, and the more sizeable option expiries today include $1.4bln rolling off at Y155.00 - which could be influencing price action here.
  • We wrote last week that while the technical trend condition in USD/JPY remains positive, the next phase of strength could be harder to come by without another major shift in Fed policy pricing, as positioning looks stretched and diplomatic blockers to potential intervention appear to peel away. This remains the case as outright JPY net short was unchanged in last week's CFTC release, contrasting with a trimming of positioning across both EUR and GBP.
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  • USD/JPY shows just above the overnight highs to print again the best levels of the day and narrow in on the cycle high at 154.79.
  • Activity so far Monday is on the muted end of the scale, with cumulative JPY futures volumes around 25% below average for this time of day - potentially indicating a lack of participation on the recovery off 154.60.
  • JPY selling in the crosses also contributing as AUD, NZD sit firmer on the session, and the more sizeable option expiries today include $1.4bln rolling off at Y155.00 - which could be influencing price action here.
  • We wrote last week that while the technical trend condition in USD/JPY remains positive, the next phase of strength could be harder to come by without another major shift in Fed policy pricing, as positioning looks stretched and diplomatic blockers to potential intervention appear to peel away. This remains the case as outright JPY net short was unchanged in last week's CFTC release, contrasting with a trimming of positioning across both EUR and GBP.