Yen bears regroup after attempt at 100 barrier fails again
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The U.S. dollar was nursing a grudge in early Asian trade on Tuesday after another attempt at 100 yen failed due to options-related offers, but traders suspect it is only a matter of time before the psychological level is broken.
The greenback bought 99.35 yen, little changed from late New York levels but down from Monday's high near 99.90. Traders said there is demand to buy dollar/yen on dips and a clear break above 100 will pave the way for a retest of the April 2009 high around 101.45.
The yen's downtrend remains firmly intact with Japan's radical monetary stimulus programme giving investors no incentive to hold the Japanese currency. The market will also be wary of buying the yen in the lead up to the Bank of Japan (BOJ) policy meeting on Friday.
"USD/JPY made another failed run at the 100.00 figure, but the BOJ interest rate decision on tap for later this week may spur a sharp selloff in the yen as the central bank takes a more aggressive approach in achieving the 2 percent target for inflation," said David Song, analyst at DailyFX.
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