JPY Trading Outlook (17-06-2014)

USD/JPY Risk aversion kept the yen bid to begin the week, but ranges were tight ahead of the FOMC meeting on Wed. Solid US econ data was largely offset by the IMF’s sharply reduced 2014 US GDP f/c, with curve steepening dominating fairly tight Tsy ranges. Nikkei weakness o/n was trimmed a bit, but USD/JPY failed to clear the USD1.35b 101.95 NY expiries. The pair is wedged between the 200-DMA by Thur’s 101.60 low and the last two days’ highs at 102.14. Japan’s May Trade report is out Wed to provide local interest. There is growing impatience from the mkts and from the BOJ on Abe govt structural reforms, the latest details of which are expected on June 27. Minutes from the last BOJ probably won’t fill in many gaps. EUR/JPY got a short profit-taking lift after the post-ECB lows by 137.70 held again and traders pointed to a BB article that basically reaffirmed mkt expectations that the ECB will be on hold until after the AQR ends and TLTROs are launched. Nevertheless, EUR/JPY remains inside Friday’s range and well below key resistance in the 138.80-90 range. Oversold daily & weekly techs give the cross some near-term support.