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May 27, 2013
USD/JPY regains 101.00
FXstreet.com (Barcelona) - The USD dollar is picking up pace against the Japanese yen, extending its bounce off lows around 100.80 and pushing the pair back above the key resistance at 101.00.
“Appreciation pressure on the yen may be coming from the unwinding of short yen hedges by equity investors. Many of the foreign investors who have poured almost $80 bln into Japanese equities this year have hedged the currency risk by selling the yen. However, given the slide in Japanese share prices, they may now be over-hedged. They need to buy the yen to reduce the hedge”, assessed the analysts at BBH.
The pair is now up 0.08% at 101.11 and a breakout of 101.65 (hourly high May 27) would clear the way to 102.56 (61.8% of 103.74-100.83) and finally 103.57 (high May 23). On the downside, support levels are located at 100.66 (low May 24) followed by 100.62 (MA21d) and then 100.37 (Kijun-Sen line).
“Appreciation pressure on the yen may be coming from the unwinding of short yen hedges by equity investors. Many of the foreign investors who have poured almost $80 bln into Japanese equities this year have hedged the currency risk by selling the yen. However, given the slide in Japanese share prices, they may now be over-hedged. They need to buy the yen to reduce the hedge”, assessed the analysts at BBH.
The pair is now up 0.08% at 101.11 and a breakout of 101.65 (hourly high May 27) would clear the way to 102.56 (61.8% of 103.74-100.83) and finally 103.57 (high May 23). On the downside, support levels are located at 100.66 (low May 24) followed by 100.62 (MA21d) and then 100.37 (Kijun-Sen line).