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UST Yields Buoys USD/JPY, Mrs Watanabe Provides Counter

JPY
MNI (London)
  • The rise in UST yields, seen as the NY market returned from its long weekend holiday Tuesday, provided the fuel to take USD/JPY through Y106.00, finding a top into the NY close at Y106.07
  • Further buying in pre Tokyo trade allowed rate to post an extended high of Y106.22. However, the move met profit take resistance from the oft mentioned Japanese retail sector (Mrs Watanabe - have been running decent sized long positions in this recent rally) which eased rate back to Y105.84, the move also tracking an easing in UST yields.
  • As UST yields picked up into Europe so USD/JPY has edged back above Y106.00.
  • Resistance expected into the Y106.20/30 area, a break to expose Y106.50. Weak talk in Asia possible barriers at Y106.50, stronger at Y107.00 though no confirmation heard for this.
  • Move up also respecting the top side of the 1.0% 10-dma envelope, currently comes through at Y106.29.
  • Asian traders also mention that leverage and IMM accounts have pared their short positions so upside stops begin to thin.
  • Support Y105.85/75 ahead of Y105.50.
  • MNI Techs: USDJPY found support last week at the Feb 10 low of 104.41 and bulls have since not looked back. Yesterday's climb resulted in a break of resistance at 105.77, Feb 5 high. This confirms a resumption of the uptrend that started Jan 6 and reinforces the significance of the recent key technical break - the breach on Jan 27 of the bear channel resistance drawn off the Mar 2020 high. The focus is on 106.26 next, a Fibonacci projection.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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