London Open – Nikkei up 2 %; JPY offered by Milan Cutkovic

It has been a rather quiet Asian session in FX, with flows in the major pairs light, aside from USD/JPY. After we have seen some JPY short covering yesterday, demand for USD/JPY picked up at the NY open and the pair has remained well-bid throughout the past two sessions. This was supported by the Nikkei, which finished the day 2 % higher. Real money funds have been good buyers of Japanese equities overnight, according to sources.

As we are heading into the London open, the USD remains bid. EUR/USD is testing the earlier low at 1.2415, while Cable in consolidating between 1.5830-50. Strong tech support noted in the 1.5770-90 area. EUR/CHF, which got a lot of attention yesterday, is trading at 1.2026 (yesterday’s low was 1.2018).

Looking ahead, there are no notable data releases or events today. It is also a national holiday in Canada and US, but the local stock markets will be open.

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