You can’t stop USD/USD, you can only hope to contain it…
USD/JPY has been on a steady and impressive grind higher much of this week, topping the 79.00 level overnight and setting up shop at 79.30 at the moment.
As ever, there are rumored exporter offers at 79.50 but it certainly appears that they are lighter than typical.
One wonders whether the Japanese Ministry of Finance has put out the word to Japan Inc. to hold off on its year-end repatriation as it will be rewarded with higher prices if it does. Given the massive intervention at the end of the fiscal half-year end on October 31, it stands to reason.
Massive barriers and other exotic options are rumored to be struck at the 80.00 level so a rally toward that big, round number next week seems pretty likely in my view.
Solid bids are seen in the 78.60/80 area on pullbacks.
The big shift in risk appetites in the last 24-hours are boosting US yields,a support for interest-rate sensitive USD/JPY. US 10-year notes are up 5 bp today to 2.035%, up 12 bp from recent range lows.
Same story in bunds, which are 13 bp firmer in yield since yesterday morning, now at 1.94%