USD/JPY has held up very well this week despite tepid demand for US Treasuries at this week’s auctions. The higher yields resulting from the uninspired auctions are a factor as are signs today of Toshin demand (demand from Japanese investment trusts).Throw in some risk appetite and it’s happy days for the dollar.
The seven-year note auction results are set to be released in a just under an hour. If the auction is well-received, yields may drop and USD/JPY could suffer a setback. USD/JPY pullbacks have been limited to the 95.40s near-term. A break below 95.35 will see some short-term bulls head to the sidelines.
