After closing in NY at 81.75, USD/JPY traded a tiny 3 pips higher in Asia easing below 81.50 a short time ago – low so far 81.43. Overnight USD/JPY got to 81.99 with market talk that orders were thick around 82.00. There is chatter that exporters are stepping up their selling interest prior to month end.
The most surprsing aspect is that the near 40bp rally in the US Treasury 10-yr yield over the last forthnight has transpired into so little USD/JPY strength. One suspects that once the Fed meeting is out of the way the focus may return to the topside. If yield is the game it won’t be found in JPY.