JPY Trading Outlook (18-06-2014)

USD/JPY An above-forecast US CPI report gave USD/JPY a lift with rising yield spreads, though prices barely penetrated the daily Cloud base at 102.22 before settling in ahead of the London close. USD/JPY hasn’t had much luck holding rallies beyond the daily Cloud (102.22-66 last) since plunging below it in Jan. Soft US housing data and doubts tomorrow’s FOMC results will show meaningful policy variation from the last were enough to keep USD/JPY gains in check. Yen traders will also be watching for fallout in the EMs from higher US rates and possible risk-off feedback into the yen (funding shorts covered). The hourly down TL from 102.80 is by 102.30 now and the next upside pivot pt. The Kijun at 101.80 and the 200-DMA by last week’s 101.60 low are the key supports in case Japan’s Trade deficit does not expand as expected in tonight’s May release or the FOMC throw cold water on USD bulls looking for hints of rate hikes sooner than later. AUD/JPY’s drop to 95.14 o/n was caught between the daily Cloud top & 50-DMA. GBP/JPY shrugged of the low UK CPI and EUR/JPY deferred to Fri’s 138.55 high. BOJ Minutes also out tonight.