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EUR/JPY still has traction as EUR/USD holds its ground

Yesterday afternoon the EUR/JPY lifted to set a new 2023 high at 161.80. The was also a new 15 year high for the cross. It later closed in the US at 161.46. That was not a new 15 year daily closing high though, as that had been set the day before. Irrespective of that, the EUR/JPY is still pressing higher. That has been helped by fresh Yen weakness since this time yesterday morning, notwithstanding the drop back in the EUR/USD since then. The market is still playing the carry trade on this one, but in truth it is slightly by default, because the main thrust of Japanese investor Yen outflow is versus the dollar. We had reports circulating this week, of significant flow into US bonds from Japanese investors over the past couple of months and of course that is understandable given the yields on offer. The point here is; that all the time the Yen remains weak versus the dollar the EUR/USD continues to hold its ground in relative terms, the EUR/JPY will keep trying to press higher. The range seen so far today has been covered by 161.36 to 161.63. It is just now trading at 161.56

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