JPY Trading Outlook (21-07-2014)

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.