USD/JPY: funds trimming longs towards 116.00

By FXStreet There is very little going on for the Tokyo open and with China out, things might be a little calmer for at least the week ahead in the absence of any surprises. USD/JPY is a non event on the open oscillating around the psychological 117 level.

Meanwhile, as shown in the CFTC report, leveraged funds trimmed their net JPY longs post the BoJ’s surprise easing for the first time in six weeks by USD0.3bn to USD1.5bn.

“After the BOJ rate cut surprise at the end of January, we had expected further yen weakness. However, the drop in equities and US yields offset the monetary policy considerations and drove the dollar from near JPY121.40 to JPY116.30,” explained analysts at Brown Brothers Harriman.

USD/JPY levels

Analysts at Brown Brothers Harriman suggested, “The technical indicators are mixed, but the inability to move through JPY117.50 after the US jobs data and rise in US rates is disappointing. At the same time, many observers suspect that the BOJ could cut rates further if the yen’s strength persists. The JPY116.00 area is still key support for the dollar. A convincing break could open the door to significant dollar losses, and would likely …read more

Source:: FX Street