USD/JPY moving higher in very thin pre-Tokyo trade

USD/JPY topped out ahead of 145 last week, peaking ahead of barrier options the level and getting driven down later in the week by comments from the MoF and Bank of Japan Governor Kuroda himself.

• Knock out options 145 in USD/JPY - defensive sellers ahead the level

• USD/JPY falls further on the day amid softer dollar, Kuroda jawboning

This time of the 24 hour forex cycle is just about the thinnest for liquidity Liquidity Liquidity refers to the extent of a financial instrument’s ability to be bought or sold without causing price fluctuations. Thus, if an asset is extremely liquid, it means one can trade that asset in the knowledge that one’s specific dealing won’t create significant movements in the market.This is because there exists such a large number of traders going both long and short, generating huge volume for that particular asset. Liquidity in the FX MarketTake the example of the foreign exchange marke Liquidity refers to the extent of a financial instrument’s ability to be bought or sold without causing price fluctuations. Thus, if an asset is extremely liquid, it means one can trade that asset in the knowledge that one’s specific dealing won’t create significant movements in the market.This is because there exists such a large number of traders going both long and short, generating huge volume for that particular asset. Liquidity in the FX MarketTake the example of the foreign exchange marke Read this Term. US markets have pretty much shut up shop for the day and its just New Zealand and Australia getting active.

USD/JPY is threatening last week's high.

The USD is bid after the high inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term report from the US on Tuesday:

• Forexlive Americas FX news wrap: USD soars on CPI, equities crushed
• US CPI responses - Nomura now forecasting a 1% FOMC interest rate hike (100bp)

I posted this earlier:

• USD/JPY back on approach to 145 - reminder of the warning signs for BOJ FX intervention

Its too early for Japanese jawboning, but stay tuned!