Overnight trade in Asia has been fairly active with the JPY seeing across the board weakness, USD/JPY up at 96.60 compared to a North American close Wednesday around 95.25, while EUR/JPY is up at 133.55 from around 131.80.
Japanese corporate accounts were reportedly good buyers of USD/JPY on its stop-fuelled advance, while Japanese retail accounts were active in buying the JPY crosses.
The JPY weakness comes as Japanese investors go in search of improved returns/yields, and comes a day after Japanese retail accounts poured $2.4 bln into new mutual funds investing in overseas assets, in the biggest single day of fund launches this year. The JPY weakness also comes at a time when U.S. bond yields are soaring.
Indeed there is a growing worry that the back-up in U.S. rates could serve to choke off U.S. economic recovery before it has really begun, and this has served to dent risk appetite somewhat with the likes of EUR/USD and GBP/USD seeing sharp sell-offs in late U.S. trade Wednesday.
