Yen Outlook
04:20 GMT February 14th USD/JPY and JPY crosses surged overnight, some to levels not seen for a month. Technically, many of these pairs look to have broken out of their recent range and many players are now looking for moves higher. Stronger than expected US retail sales provided the catalyst but more stable stock markets must be cited as well as the profusion of JPY longs held by short-term IMM CTAs and specs. In the case of USD/JPY, the floor looks to be gradually moving higher with bidding interest now up to around 108.00 and trailing lower. Granted, trader stops are noted below this level and 107.40 but bids look to be larger. Japanese exporters took advantage of the move back up to the 108-handle to sell but many of these players" offers have been filled. More lurk above but these players are not expected to be as aggressive as thought with USD/JPY now seen trending up. Option players look to defend option barriers at 108.50 and 109.00, and should provided added headwind. The range today was 108.01-32. EUR/JPY traded 157.34-85, GBP/JPY 211.94-212.69, AUD/JPY 96.90-97.63 and NZD/JPY 84.77-85.12. The Nikkei is up 3.5%.
Don
