The march of the JPY continues as the dollar exodus spreads across the markets. Fears that Japanese deficit spending will soak up more domestic savings and cut the amount of Japanese capital available for export have been boosting the JPY since the Japanese elections over a week ago. Japanese retail investors have been heavily long USD/JPY and JPY crosses and many are experiencing painful margin calls. Expect the situation to worsen if 90.00 is broken.
Dealers say the BIS has been a buyer on dips this morning while there is talk of barriers at 90.50 and especially 90.00. Stops are clustered below each level. Strong offers are eyed now at the 91.10/20 region.
