Yen buying intensified in the London market, sending USD/JPY sharply down to around 154.06. With the New York market closed, thin trading continued and the yen appreciation trend spread.
Yen buying intensified at the start of the London session, sending USD/JPY sharply down from the upper 155s to the lower 154s, with the pair briefly falling to around 154.06. It subsequently traded in the upper 154s, while thin trading ahead of the New York market holiday closure created conditions in which stop orders and other factors prompted yen buying.
EUR/JPY plunged from the 181s in the Tokyo market to the lower 179s at the start of the London session. GBP/JPY was also sold from the 211s to the upper 208s, with yen appreciation spreading across yen crosses. EUR/USD traded in the lower 1.16s, with the dollar showing signs of weakening.
USD/JPY fell in tandem with mounting selling pressure on the dollar. Although the range was limited, the move again established a yen appreciation trend. Rebounds were limited to the upper 154s, and there were no signs of intervention at that point.
As the New York market was due to close for the Labor Day holiday, market participants shared the view that liquidity would dry up during the session. The market may therefore lack clear cues for its next move.