USD/JPY is trying to regain its footing after slipping back to the 88.59 after triggering a large pocket of stop-loss sell orders below 88.90. The dollar has seen some weakness across the board this morning with the market unable to make much hay with its already large short-JPY position. The selling in USD/JPY was particularly intense once it became clear that the improved pending home sales data was not going to result in a sustauined bounce in USD/JPY and EUR/JPY on a fall in risk aversion.
Now that short-term specs have been washed out, the equity/yen correlation may work a bit better. 89.20/25 is now resistance on rebounds while the 88.40/60 area is support. More stops are eyed around 88.30/35.