USD/JPY: stay bullish above 107.65 folks

USD/JPY has been in free-fall since the 31st January, dropping from the 111 handle and down to 108.51 the low.

The pace of the Yen commenced to the downside on the Tokyo open last night on a lower Nikkei. 109.20 finally gave way and we have barely looked back since as the comments from BOJ board member Sato stuck the nail in the coffin for it to trade below 109 the handle. 

From the US session, we have seen average headline details on the ADP report.  "Although ADP's estimate of employment remained below 200k in May, we would caution against relying on it too heavily as a guide for tomorrow's labour report," suggested analysts at ING, ", This is only one (possibly relatively small) part of the overall forecasting model that they employ. It is also a function of last month's official payrolls data (ie an autoregressive model) and a business conditions index (which is composed of activity data such as industrial production and GDP). "

USD/JPY levels

While the Yen is on the comeback in a big way, analysts at Commerzbank however explained that they look for dips lower to remain well supported in the 108.30/107.65 band. "Beyond this dip back, we are overall bullish and attention is on the 111.90 last reaction high – this will need to be eroded to confirm that the market has based (favoured). We look for dips to hold over 107.65 and while above here stay bullish."