JPY Trading Outlook
The Japanese Yen (JPY) USD/JPY moved higher back above Y77 as the US economic data continued to improve. Also weighing on the Yen was reports that IMF would be stress testing banks. ADP US non farm employment change came in at 325k in December vs. 204k previously. Today’s official nonfarm payrolls is always a big USD/JPY mover and will be closely watched after the announcement.
The Japanese Yen (JPY) USD/JPY moved in a 20 pip range unable to take advantage of the USD strength with heavy EUR/JPY selling keeping the major capped. Most other Yen crosses were only down a little bit as US stocks finished positive. PM Noda talked in Japan that it will be coordinating with the BOJ to fight deflation fears going forward.
The Japanese Yen (JPY) USD/JPY struggled and fell further back as the USD weakness overwhelmed the Yen weakness in the ‘risk on’ rally. EUR/JPY was able to bounce from multi-year lows and reclaim Y100. AUD/JPY is targeting Y80 and if US data continues to be strong then USD/JPY could reverse direction and the Yen once again become the funding currency of choice.
The Japanese Yen (JPY) the heavy selling on Friday say the major open below Y77 and this continued to the be the level the pair stayed at for the entire trading day. The market will be watching closely for comments from Japanese companies and politicians about the strength of the EUR/JPY with the major trading partner slipping below Y100 and has moved down from Y170 highs 3 years ago.
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