* Other JPY pairs rally as well including EUR/JPY, shorts forced to bail again.
* AUD/JPY and GBP/JPY on higher plane, NZD/JPY about to break up.
* Still somewhat premature to label JPY funding ccy of choice for carries.
* USD/JPY offers from Japan exporters still trail up, summer exaggerates moves.
JPY pairs traded higher still overnight with USD/JPY moving back towards and above highs seen in mid-July and some of the crosses on higher planes. AUD/JPY, for one, moved above the 83.36 high recorded on August 9 and traded up to around 83.50 overnight. The cross looks to be on the way towards multiple tops seen in April ahead of 85.00. GBP/JPY too saw a big leg up overnight, up to 124.93 and clearing its now descending Ichimoku cloud. The top is at 124.60 today with the roughly flat 200-day moving average just below at 124.46. NZD/JPY too looks to break up soon, holding just below the 64.51 high seen on August 7. Even the lowly EUR/JPY rallied last night to 98.17 with premature fresh shorts forced to bail.
Despite recent JPY weakness, it may still be premature to suggest JPY is again the funding currency of choice for carries. Granted, USD/JPY looks to have broken up but this has taken place in relatively summer trading with whatever flows exaggerated by thin conditions. An USD/JPY break back up above 80.00 would provide the market with fait accompli when many return from summer and Japanese Obon breaks however. Offers in USD/JPY from Japanese exporters continue to trail up in 10-tick increments. This along with profit-takes by recent longs will likely continue to help slow any further moves higher.