Published: Monday, 27 May 2013 | 11:54 PM ET | The yen tumbled on Tuesday as Japanese shares
appeared to be stabilizing after sharp losses and extreme volatility in
the past few sessions, easing worries investors may have to close their
yen-selling positions to make up for losses. While the Nikkei's fall of more than 10 percent from its 5 1/2-year peak has reminded traders how painful a correction of one-way trade can be, the market expects the Bank of Japan's massive easing to likely weaken the yen in the long term.
"The Nikkei's trading range is narrowing down day by day. This is not like a panic we saw after the Lehman shock. If volatility is steadying at the current level, then dollar/yen is likely to head higher," said Kyosuke Suzuki, director of FX at Societe Generale in Tokyo.
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The dollar rose 0.8 percent to 101.75 yen, up more than a full yen from two-week low of 100.66 hit on Friday, staying above key technical support levels, including 21-day moving average, at 100.80 yen on Tuesday.
Its kijun line on the daily Ichimoku charts, now at 100.37, is also seen as a major support, said Osamu Takashima, chief FX strategist at Citibank.
Japan's Nikkei share average rose 0.5 percent on Tuesday, recovering from a three-week intraday low hit earlier in the day.
source : http://www.cnbc.com/id/100768253
