Forex Market Update: Japanese Yen Declines Across the Board, GBP/JPY Advances to Fres

The USD was broadly higher, led by JPY weakness with a wide range of buyers behind the USD/JPY surge including Japanese security houses, macro and model funds, spec names and stops, helping to push USD/JPY above 96.00 to 96.58. The JPY weakness helped push the EUR/USD to the lowest levels in a week of 1.3793 with sterling triggering stops under 1.5950 to trade to lows of 1.5900. There was no strong catalyst for the move though the rise in U.S. yields to six month highs is seen USD supportive, at least this time, and not a reflection of a sell-off in USD assets. The inability of EUR/USD to find a foothold above 1.40 the last two sessions has also squeezed out USD shorts as well. GBP/JPY traded to the highest since November with Japanese FX margin accounts caught short this cross. Asian stock markets were mixed with the Nikkei erasing early losses to rally as JPY weakened. Shanghai, HK and Taiwan were closed. Gold slumped almost $7 on the stronger USD with crude futures holding just under $63. Treasury yields held near six month highs, taking the 10-yr benchmark JGB yield to six-month highs around 1.50%.