JPY: USD/JPY-Takes A Breath Toward 157.00 As Market Positions For The Weekend
The USD/JPY range today has been 156.69 - 156.98 in the Asia-Pac session, it is currently trading around 156.85. USD/JPY has continued its steady march higher as we head into the weekend's elections. A large portion of the leveraged short Yen positions being built up heading into the elections would have been washed out thanks to the Fed/MOF rate check after the BOJ rate decision. This large move lower was more down to overextended positioning than fundamentals and as we head toward this weekend's election all the reasons for the Yen short have come back to the fore. This should see USD/JPY which looked like it had lost its immediate upward momentum remain well supported on dips now as the market looks toward the 160.00 area once again. It moved very easily back through 156.00-156.50 overnight as its upward momentum looks to be rebuilding, first support on the day is back toward 156.00 then 155.00.
- MNI AU - Offshore Investors Buy Most Japan Bonds Since April 2025 : The stand out in the Japan weekly flow update (to the week ending Jan 30, last Friday), was the surge in offshore buying of local bonds. The +2trln in net buying was the strongest weekly inflow since mid April last year.
- “Japan’s voters look set to back PM Sanae Takaichi’s bold fiscal and China stances — an assertive style decades in the making. Markets are wary.” - BBG
- Options : Close significant option expiries for NY cut, based on DTCC data: 156.00($1.39b). Upcoming Close Strikes : 156.00($891m Feb 6), 157.00($784m Feb 6), 157.00($754m Feb 10) - BBG.
- The USD/JPY Average True Range(ATR) for the last 10 Trading days: 141 Points
Fig 1 : USD/JPY Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance
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