JPY Trading Outlook (24-07-2014)

USD/JPY shorts who were looking for a bit more downside after Tues’s lows were broken o/n were disappointed by the 1.5pips of follow-through and covered. The lack of major economic news in the US allowed the mean reversion toward the falling 21-DMA (101.59) to persist, despite a slight drop in USD-JPY yield spreads. More supply is noted by 101.80. The daily Cloud span is 101.91-96 on Thur, with the 200-DMA at 102.03, and exporters and range traders are touted sellers into there. Japan’s June Trade report and July Markit PMI will be eyed for whether they jibe with the BOJ’s view that QQE is doing fine for now. Record low 1-mo vols have yet indicate concern about either a clear 101 breakdown or resumption of the Abenomics uptrend; the latter being something Japan Inc is far less keen on due to high import costs, and the latter the BOJ wants to avoid in their reflation quest. EUR/JPY malingers close to the ’14 low at 136.25, oversold, but unloved. GBP/JPY’s correction is holding above 50% Fibo sppt at 172.42, with the rising daily Cloud & 100-DMA soon to bolster that. AUD/JPY spies the ’14 high at 96.50 after a 61.8% Fibo last week & AUD CPI o/n.