USD/JPY dumps half a yen in Tokyo, below 110.00

USD/JPY bears smashed the doors down in the Tokyo open, despite Asia opening on the coattails of a solid performance of overnight bourses and U.S. stocks.

USD/JPY dropped half a Yen on a progressive yet rapid plunge, falling below the 110.00 handle without any explanation at time of writing although what has come to light were remarks eaerlier that Yen intervention will stay in toolbox, says Masatsugu Asakawa. 

"As vice-minister of finance for international affairs, Mr Asakawa is the senior official in charge of currency policy — and since Japan thinks yen intervention is a legitimate tool of public policy, he has formidable power," - the FT reported.

USD/JPY reached a low of 109.54 with highs at 110.24.

However, in the U.S., USD/JPY rallied up to 110.44 on the back of risk-on, despite a lower XFFE as markets look towards July a potentially more appropriate time line for the Fed to hike again.

June? A live meeting? Come again?

From data, the dollar dropped due to the US services PMI for May and adding to the bearishness in the manufacturing sector.

USD/JPY levels

The move has crashed through the 4hr 50 sma at 109.66. Next levels to watch are where Valeria Bednarik, chief analyst at FXstreet noted the 100 SMA advancing below the 200 SMA, with both converging in the 108.80/90 region. "A break below this last then, should be the kick start to a downward continuation, down to 108.70," she suggested. On a recovery, analysts at Commerzbank remain with 111.90 as being the last reaction high to confirm that the market has based.