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BUZZ-COMMENT-Myriad factors behind USD/JPY surge, expect choppy August

Credit: REUTERS/THOMAS WHITE

USD/JPY has extended Friday's surge in early Asian trade Monday as news of an M&A deal adds to the factors driving it higher, but players in Tokyo expect trading to be choppy with liquidity usually at a premium in August.

Aug 3 (Reuters) - USD/JPY has extended Friday's surge in early Asian trade Monday as news of an M&A deal adds to the factors driving it higher, but players in Tokyo expect trading to be choppy with liquidity usually at a premium in August.

Jaw-boning by Japanese government officials and month-end rebalancing by Japanese banks and other institutional players helped lift USD/JPY from a 104.20 EBS low in Asia Friday. The rise continued into the London fix, accompanied by heavy short-covering from speculative players . Buying persisted into New York tradewith Japan's "whale" or Government Pension Investment Fund reported to be among the buyers.

USD/JPY has rallied further in Asia from an early 105.72 low to 106.44 on fresh news that Seven & i Holdings is looking to buy U.S. Speedway from Marathon Petroleum for around two trillion yen.

Although option expiries will help to contain price action, markets are typically thinner in August due to summer holidays and trading is likely to be choppy, with one-way moves in both directions. USD/JPY looks to have found a near-term base at 104.00, if not 105.00, while offers are likely from around 107.00, ahead of the 55-day moving average (DMA) at 105.22. The 100 and 200 DMAs are at 107.55 and 108.24. Previous comment . See also and .

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USD/JPY: https://tmsnrt.rs/3fmWomr

USD/JPY nearby option expiries this week: https://tmsnrt.rs/3goRKpc

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

((haruya.ida@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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