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Forex pairs in this Article » USD/JPY (Barcelona) - Bank of Tokyo Mitsubishi Strategists note that the recent increase in IMM yen short speculative positions was always an indication that perhaps the upside potential for USD/JPY was limited.

Key Quotes

“The under-performance of Japanese equities has resulted in some correction lower in USD/JPY and if this risk aversion was to intensify then there is certainly scope for a further decline lower to around the bottom of our range toward the 100.00 level.”

“However, the solid ADP report yesterday would suggest a greater chance of a positive payrolls report.”

“That in theory is supportive for USD/JPY from a spreads perspective but if the equity market was to sell-off further that might put USD/JPY under downward pressure.”

“In any case, it would appear to us that QE tapering is well priced now and in that sense a solid employment report should be supportive for USD/JPY.”
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