The yen was trading higher across the board yesterday after China stepped up its restrictions on required Chinese bank reserves. The move surprised the market and pushed traders to drop short yen positions as the currency strengthened for the 4th consecutive trading session. While this move by China can be seen as a negative for Asian economic growth, the step may be needed to slow the fast-paced Chinese economy.
The USD/JPY fell 1.01% and is currently trading at the 91.05 level after opening the day at 92.18. The pair accelerated its gains after crossing the significant 92.25 support line. The yen also had significant gains against the pound and the EUR. The GBP/JPY is trading at 147.09 from an opening day price of 148.34. The EUR/JPY is currently trading at 131.80 after opening the day at 133.53.
The USD/JPY hit a low of 91.00 during today's trading session. If the pair breaks this key support line, we could very well see the pair retrace its path to the next major support line near the 89.60 level.