USD/JPY opened in NY at 119.21/24 today, already under
pressure from carry trade unwinding as risk aversion soared on the back of the
8.8% fall in China stocks. Emerging market currencies along with global stocks
were similarly targeted with the DJIA falling 359 pts by the afternoon and US
ten-year bond yields plummeting from 4.62% to 4.46% on risk aversion. This
weighed on the dollar but so did carry trade unwinding which ultimately took
USD/JPY to 117.50 into the afternoon as stops at 118.35-45 were triggered. Risk
for further losses is strong, targeting 115 in coming sessions.
EUR/JPY opened at 157.67 and triggered stops under 157.00 to trade to 155.73.
AUD/JPY opened at 94.44 and triggered stops under 94.00 to trade to 92.55. Gold
is seen under further heavy selling in Tokyo on unwinding of Tocom positions
tonight. GBP/JPY fell from 234.08 at the NY open to under 231.00 into the NY
close. EUR/JPY, AUD/JPY, USD/JPY, GBP/JPY and CAD/JPY are all closing under the
Ichimoku clouds, a bearish signal for trading in the Tokyo markets. The Nikkei
is seen suffering from a strong JPY and the US stock losses. |