JPY: Recovering From Two-Day Two Percent Decline - BBH
Research Team at BBH, notes that the Japanese yen is recovering from
two-day two percent decline as the yen is the strongest of the majors
today, rising about 0.6%.
Key Quotes
“The
greenback initially extended its gains marginally in early Tokyo before
the selling pressure emerged. The price action reinforces the
importance of the JPY 109.50 resistance area. The Nikkei initially moved
higher and filled the gap created by the sharply lower opening on May
3, following disappointment with the BOJ lack of action at the end of
the prior week. However, after the gap was filled the Nikkei, like the
dollar reversed lower.
These dollar downticks look corrective
in nature. The greenback has found some bids near JPY108.50. If this
holds in the early going in North America, the dollar can recover and
even re-test the highs as the unwinding of the large speculative long
yen position is trimmed. Upside momentum has stalled, and a
cautiousness may be creeping in ahead of the G7 meeting and the heads of
state summit later this month.”
