JPY: USD/JPY - Sees Sellers Into the Fix But Good Bids Emerge Below 146.00

The Asia-Pac USD/JPY range has been 144.40 - 145.29, Asia is currently trading around 144.95. USD/JPY had a pop higher just after the Japanese Fix as Ueda said Japan’s price trend still has some way to go to reach their 2% target.

•  BoJ Governor Ueda has been before parliament, answering questions from lawmakers. The Governor noted limited policy space on the downside, given the current 0.50% policy rate. This is if a fresh stimulus is needed. The real rate is being kept sub 0% to stimulate the economy further, as Ueda states that Japan is still some distance from the 2% inflation objective. Ueda reiterated that they will raise rates if they have confidence in achieving the 2% target.
• "KATO: SEEKING MORE JGB HOLDINGS BY DOMESTIC INVESTORS, WILL MAKE EFFORTS TOWARD APPROPRIATE JGB MANAGEMENT. CRUCIAL TO SEEK JGB HOLDINGS BY DIVERSE GROUPS" - BBG
• Demand seen again today in USD/JPY as risk continues to outperform, large option interest around these levels could see it do some work around here.
• The market still seems very confident of a move lower in USD/JPY but with positioning quite large now we have seen the risk of pullbacks increase.
• With the failure to break below 142.00 last week, price is back in its recent 142.00 - 147.00 range and will need a break either side of that to get a clearer direction. US CPI tomorrow will potentially have a say.
• Options : Close significant option expiries for NY cut, based on DTCC data: 144.00($708m), 143.30($618m). Upcoming Close Strikes : 143.00($1.28b June 12), 140.00($1.22b June 12), 144.00($1.19b June 13), 145.00($4.37b June 16).

• CFTC data shows Asset managers maintained their already extensive JPY longs, and leveraged funds are trying again to build their own longs.

  Fig 1 : USD/JPY Spot Daily Chart

  

  Source: MNI - Market News/Bloomberg Finance L.P

The NZD/USD had a range of 0.6028 - 0.6059 in the Asia-Pac session, going into the London open trading around 0.6055. The NZD continues to find demand on dips as Stocks have had a good session. NZD/USD looking to hold the 0.6050 area and press onwards to new highs.

• (Bloomberg) -- “Economists at ANZ Bank New Zealand and ASB Bank have raised their 1q economic growth forecasts, adding to signs the RBNZ may be justified in pausing interest rate hikes next month, according to emailed notes. ANZ expects the June 19 report will show GDP grew 0.7% after provisionally projecting 0.6%.”
• “NZ TREASURY EXPECTS GROWTH IMPULSE FROM NET EXPORTS WILL WANE - BBG.”
• The NZD has found solid demand back towards the 0.6000 area as dips remain well supported, aided by the more positive risk backdrop.
• The support back towards 0.5850 has held very well, and while this continues to hold expect buyers to be around on dips. A clear break above 0.6050/0.6100 could provide the spark for the next leg higher. The market remains short and above here they could be forced to pare back.
• CFTC Data showed Asset managers maintaining their shorts, while the leverage actually added to their shorts last week.

• AUD/NZD range for the session has been 1.0763 - 1.0797, currently trading 1.0780.  A top looks in place now just above 1.0900, the cross topped out yesterday towards the 1.0800/25 sell area, the first target looks to be around 1.0650.

  Fig 1: NZD/USD Spot Daily Chart

  

  Source: MNI - Market News/Bloomberg Finance L.P

The AUD/USD has had a range of 0.6502 - 0.6530 in the Asia- Pac session, it is currently trading around 0.6528. The AUD has again found demand back towards the 0.6500 area as it eyes testing above the 0.6550 area. Stocks have performed well in the Asian session and the AUD continues to benefit from this.

• AUSTRALIA DATA: May NAB Business Labour Costs Fastest Since January. NAB business price/cost components in May were mixed containing elements of concern and optimism. The pickup in labour costs in addition to signs that wage growth is rising again are likely to be monitored closely. The employment component of the survey though was very weak which may pressure pay gains.
• AUSTRALIA DATA: Westpac's measure of consumer confidence rose 0.5% in June to 92.6 after May's 2.2% increase boosted by 50bp of RBA easing this year and lower inflation. The index is at its highest since January but still 1.8% below that level as global events have weighed on sentiment.
• Price in the 0.6350 - 0.6550 range for now, a sustained break above 0.6550 is needed for the move higher to accelerate. Price looks set to test the top end of the range but I am not sure how far it extends until we get US CPI tomorrow out the way.
• Expect buyers to continue to be around on dips while the support in the AUD holds, a close back below 0.6350 is needed to challenge the newly formed uptrend. 
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.64200(AUD771m)/ 0.6460(AUD 529m). Upcoming Close Strikes : 0.6350(AUD 711m June 12), 0.6600(AUD643m June 12)
• CFTC Data shows Asset managers maintaining their shorts, the Leveraged community though continued to add to their shorts once more.

• AUD/JPY - Today's range 94.15 - 94.59, it is trading currently around 94.58. Price broke the multiple tops around the 94.00 area over NFP’s. It has since managed to hold these gains, while this continues focus will turn to the high towards 96.00. Support should now be back towards the 93.00/50 area.

  Fig 1: AUD/USD spot Daily Chart

  

  Source: MNI - Market News/Bloomberg Finance L.P