The emergence of “semi-official” bids in USD/JPY combined with moderating losses in US equities have combined to prompt short-covering in the heavily oversold JPY crosses. EUR/JPY is well supported as dealers trim dollar longs against the euro owing to the dour US employment picture. The cross trades now at 152.80 from lows in the 150.50 region.
UPDATE: Dealers blame some of the renewed JPY weakness on talk that the BOJ “checked rates”, a modest form of protest in which the BOJ calls around to Japanese banks. Some fear it is a prelude to intervention, but we are miles away from that sort of activity.
