Not a huge downdraft in risk appetites today but clearly there are some cracks in the foundation and traders are nervous that the central banks alone can not keep markets aloft. Despite those jitters, USD/JPY dips were limited to 30 pips today and we’ve taken back more than half of that decline already.
Hopes for an aggressive BOJ, loads of options related interest and suspicions that the MOF could spring another year-end surprise to weaken the JPY to allow exporters to revalue at more favorable FX rates are all helping bolster the greenback. Japanese credit concerns are also a factor.
Solid bids are rumored on dips to 79.50/60 while substantial offers are seen from 80.00 to 80.20 and again ahead of 80.50 barriers.
