USD/JPY punches through 120.00 in largest rally since March 19.
USD/JPY is leading a broad bid in to the US dollar (AUD/USD also sagging badly). There's no clear catalyst for the dollar bid but it's quarter-end so flows are probably the driver.
The option cut at the top of the hour looms but it's a small one today with much bigger volumes set to roll off tomorrow with month end. The full list of options is here. There is talk of buying in EUR/JPY that's also likely helping to boost USD/JPY.
Technically, the 61.8% retracement of the decline since 121.20 is at 120.10 so that sets up some resistance. There are offers at 121.50.
What's next?
Trading around quarter-end is a tricky proposition and it's not the time to fall in love with any position. In general, I think the strategy is to go with the momentum because whatever flows are going through are likely to continue. The time to be cautious is when London goes offline; that's when there tends to be a retracement. The talk of thin liquidity adds to the case.
Note that London changed the clocks today so the close there comes one hour earlier for US traders.