FX Update - USD/JPY

USD/JPY could have potential on the upside, with talk that Japanese names are beginning to front run flows ahead of next week's investment trust launches. There is reportedly over JPY500bln of launches next week and the take up is expected to be strong, with investors increasing their speculative activity of late. There is also some technical significance being flagged, with Tom De Mark followers indicating an "upside 13 count" and signals that a reversal is due.

Looking at the moving averages today's 100-day MA is at 96.58 and the 200-day MA is at 96.00, which is a bullish cross and also supports this view. Japanese order books are skewed to the topside interestingly, with bids building underneath 96.00 and offers relatively thin on the topside. Notably, JPY gains this week have been linked to the SMFG stock issue and this was an influence overnight. However, the payment date for this is June 22nd and today was the last spot trading, which may make it easier for JPY to resume easier levels.