MNI China Daily Summary: Thursday, July 4

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CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS THURS

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MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

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Y110.00 Looking Vulnerable Into Europe

JPY
MNI (London)
  • USD/JPY picked up expected demand through Monday's NY session, Monday being month-end value which usually prompts US corporate USD demand.
  • This interest, along with rising UST yields edged rate back to retest its recently posted YTD high at Y109.85 ahead of the close.
  • Asia took rate through Y109.85, as UST yields continued to claw higher (UST 10-yr yields broke 1.70% to 1.7455%) posting a high at Y109.99 but was said to have met stiff resistance ahead of the Y110.00.
  • This stalling has prompted talk that the Y110.00 levels holds option barrier interest(no confirmation) and is said to be drawing protective sales ahead. However, pull backs remain shallow with the Y110.00 level looking vulnerable into Europe.
  • Above Y110.00 and rate expected to meet some residual resistance into Y110.15/25, a break to expose Y110.50, where further barrier interest suggested to reside. Support Y109.50.
  • Nothing much to mention option expiry wise for today's NY cut, but the area between Y110.00-20 holds the strikes for $2.0bln of USD puts rolling off at Wednesday's cut.
  • Month-end models have eased on their buy USD/JPY calls, though JPY likely to come under pressure from EUR and GBP demand.
  • MNI Techs: USDJPY continues to push higher with the bull trend firmly intact. The move last week above 109.36, Mar 15 high confirms a resumption of the uptrend and note that 109.56 has been breached, a key retracement - 76.4% of Mar 2020 - Jan downleg. Attention is on 110.00 and the 110.63 Fibonacci projection. Overbought conditions are still not impacting this trend and instead continues to reinforce current sentiment. 108.41 is the key support.
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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