Dollar declines after the U.S. 10-year Treasury auction; breaking through 115 yen is unlikely ~ 2017/3/9 YEN-kura's Real-Time E-newsletter "Real Top Trading"

In February, ADP private payrolls rose to 298,000, well above the median forecast of 190,000 and the expected range of 150,000 to 247,000. January's figure was revised up from 246,000 to 261,000 as well.
This makes it highly likely that the employment report on the 10th will be strong, boosting expectations for a rate hike next week.
In response to this, the U.S. 10-year yield rose to as high as 2.58%, and the USD/JPY also rose to around 114.75.

However, in the U.S. 10-year auction, the highest bid yield was 2.56% and the bid-to-cover ratio was 2.66x (vs. 2.29x previously). After that, the U.S. 10-year yield fell to around 2.55% and USD/JPY dropped to around 114.45.

There are sizable options on the 115 yen strike maturing by the 9th (about $1.2 billion) and on the 114 yen strike maturing by the 10th (about $2.7 billion). Since an option barrier at 115 yen is observed, selling pressure above that level is likely to be substantial, making a break above 115 yen unlikely.

The dollar is expected to retreat temporarily against most currencies for now.