USD/JPY consolidates losses below 120.00 after weak US data

USD/JPY traded a tight 119.51-76 range in Asia after tumbling yesterday. Lower US yields overnight following a weak ADP employment report and concerns over the US NFP report due tomorrow (+245k eyed) and headwind from topside option expiries helped cap the market despite a Nikkei rally. Option-related offers are seen large from ahead of 120.00 with $2.8+ bln eyed at this strike. Bids from Japanese investors and importers were noted from around 119.50. MoF flow data suggested very large Japanese pension fund purchases of foreign bonds and large purchases of foreign stocks in the week-ended March 28. EUR/JPY, GBP/JPY and NZD/JPY showed some spunk in the afternoon but their ranges remained relatively tight. EUR/JPY saw 128.61-97, GBP/JPY 177.16-59 and NZD/JPY 88.78-89.31. AUD/JPY remained on the back-foot throughout, pressured again by another plunge in Dalian iron ore futures.

EUR/USD and EUR complex did little if anything in Asia with most ensconced in very tight ranges. The lack of any market moving news kept most players sidelined. EUR/USD traded 1.0750-76. Some bids were noted from around 1.0750. Offers are in place ahead of 1.0800, a recent point of contention. Large-ish option expirations at 1.0700 and 1.0800 bracket the market. EUR/JPY traded 128.61-97. Stops are eyed below 128.40, yesterday’s low, and 128.00. Heaviness is eyed on 129. Much has been made of recent European interest in Japanese assets. MoF flow data for the week-ended March 28 looks to confirm this with massive flows into higher-yielding but very liquid Japanese bills. EUR/GBP treaded water between 0.7253. EUR/CHF did little between 1.0396-1.0410 but the bias looks to be down. Some stops are eyed sub-1.0395, the low last night. That said, the market does remain wary of SNB intervention.

GBP/USD treaded water between 1.4817-55 in Asia.

USD/CHF traded a tight 0.9653-74 range with few flows noted.

AUD/USD opened in Asia at 0.7598 and traded down from an early high of 0.7610 to 0.7568. The TD-MI inflation gauge suggested little chance of a blip up in inflation anytime soon, providing the RBA with plenty of scope to cut its OCR next week. OIS has priced in a 77% chance of a cut. RBA expectations and another plunge in Dalian iron ore prices helped AUD down during the course of Asian trading. AUD/NZD traded down from 1.0223 to a fresh record low of 1.0147 and moving closer to parity. Retail looks to be long (and maybe wrong) this cross.

NZD/USD closed in New York at 0.7453. An early attempt to rally was stymied at 0.7463. It fell back to 0.7425 before bouncing to 0.7469 in the afternoon. Good selling in AUD/NZD helped.

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