JPY Trading Outlook
USD/JPY recovered it's intraday dip with help from higher short-term Tsy yields and reduction in equity market losses; the latter after President Obama took a reasonably low-key tone in his latest speech on MH-17 et al. UK's Cameron was much more strident, but the mkts are sensing that the West will remain measured in their response. Most currencies are little changed to start the week, though the tone was a bit more risk-off overall and thus friendly to those buying yen dips. Offers are grouped at 101.45-50, 101.70-80 and 102.00. Local bids into 101 persist, with stops said below 101.95 and the next defense in the 101.75-80 range. EUR/JPY is digesting last week's slide, but is this week below the 55-WMA, having already broken below the weekly Cloud top, Tenkan and Kijun lines. The '14 low at 136.25 is pivotal. The IMF upped their '14 German GDP outlook, but the mkt clearly remains concerned by the EZ's economic outlook and the ECB's ltd room for maneuvering on QE. US CPI & Existing Home Sales and the EU meeting on their response to MH17 are Tues's main event risks. Japanese Trade and CPI are out Thur & Fri. Vols remain subdued.
USD/JPY Another week is ending with USD/JPY still stuck in dwindling ranges above seemingly indefatigable support by 101. Thur's risk-off flows reverses and mean reverted o/n, including Tsy yields, which recovered most of Thur's losses, regardless of soft TR/UM & LEI. A decent US earnings season and Thur's report from the Fed that US bank loans & leases expanded at a 7.7% annualized rate in Q2 keep some focus on the timing of Fed tightening, but Friday was more about booksquaring into the w/e after Thur's geo-pol derisking jag. As such, the yen was offered from Asia onward. USD/JPY's 101.09 low 3 pips above the July 10 nadir, and at the lower 21-day Bolli for a second day running, was the cue to cover. Japan's long w/e helped. As usual, topside was limited as vols fumble around record lows. Offers strewn between 101.45 and 101.80. EUR/USD's flail below 1.3500 yanked EUR/JPY briefly to a 136.72 low. This year's 136.25 low is getting close enough to sway the risk/reward analysis for would-be seller and those with hefty short profits. AUD/JPY finished a 61.8% of May-Jul rise by 94.34. NZD/JPY held its up TL fm '12. Japan Trade and CPI are out on July 23 & 24.
Go to Japanese Yen (JPY) Archive