JPY Trading Outlook (26-06-2014)

USD/JPY A sharp, short break lower for USD/JPY below recent lows and the daily Kijun at 101.80-81 was precipitated by a huge downward revision to US Q1 GDP. Ancient history and skewed by healthcare stat adjustments (ACA), the data did not have lasting impact on either Tsy yields or the USD. Curve flattening actually lifted S-T rates as L-T rates dipped. Stock futures, US & Japanese, dipped on the headlines, but then rebounded, allowing USD/JPY to hold above its June 12 swing low of 101.60 after piercing the 200-DMA at 101.69. Prices are back above the 101.75 Cloud base as we head toward the NY close, though the 101.97 high is now below the daily Tenkan. Vols remain at L-T lows and a Reuters poll shows most expect the BOJ to launch QQE2 before year-end. EUR/JPY remains stuck in tight ranges below its 200-DMA & offers at 139. Carney’s less hawkish appearance Tuesday left GBP/JPY to work off a bit more of its overbought condition, but NZD/JPY shook off a two-day pullback after using the daily Cloud top for support today. RBNZ rate hike and RBA rate cut expectations clearly favoring long NZD carry trades. MOF flows tonight.