It’s been a choppy start to the Japanese fiscal year as USD/JPY initially soared as year-end flows ebbed but soon retreated and triggered stops below the 81.80 level overnight. The selling was short-lived as traders continue to respect the MOF’s resolve to keep the JPY well below the record JPY highs of 2011 and are reluctant to stay short.
Lower US bond yields make the USD/JPY less attractive than mid-March when we hit the 84.18 level but are supportive as long as we hold above the key level of support at 2.10% on the 10-year note chart. A break below that yield would undermine USD/JPY substantially.
We sit at 2.17% this morning with USD/JPY at 82.31.