Why the USDJPY jumped 1.6% yesterday.



It was a strange one yesterday. Yes, we had risk on tones with equities green across the board and we were expecting JPY weakness, but it just seemed to keep going and going. The USDJPY put in a strong green candle with gains of around 1.6%.



The reason USDJPY jumped higher



According to Bloomberg's Market Live Blog there are a number of reasons circulating as to the reason for JPY weakness:



Japanese funds buying US dollar debt

CTA stopping out

Macro funds dumping long JPY/Asia risk hedges



The move occurred during the European Session and trading yesterday felt like a game of two halves with Europe pushing the risk on tone and then the America session pushing it further. We saw steady JPY selling all day. I was looking at the USDJPY. CADJPY and GBPJPY pairs yesterday for longs and they just kept heading north all day. It struck me as steady JPY weakness all day without a sudden move.