JPY Trading Outlook (04-08-2014)

USD/JPY There was no posting a daily close above 103 this week after today’s US jobs report came in softer than expected with components that favored the Fed’s cautious approach to normalization. PMI was above f/c, but Construction Spending tumbled, leaving end-of-week position paring to persist into the London close. Prices hit bottom after retracing 38.2% of the July rise and coming close to retesting this year’s down TL that was broken above on Wed. USD/JPY was heavily overbought on the daily studies heading into today’s event risk, making a correction almost inevitable. Tsy yields and USD/JPY vols fell, as did stocks initially, but the latter attracted bargain-hunting after the London and NY midday fixes. There’s logic in that, due to the drop in yields and the firm-but-not-Fed-tightening-frothy US data du jour. In any case, the worst-case correction scenario near-term would be a 61.8% retrace of the July rise to 101.88 & daily Cloud by 101.90 next week. EUR/JPY yet to close above the Kijun & 50% Fibo at 137.83. GBP/JPY pierced the July lows, 50% Fibo & the daily Cloud top, but not the June 30 low. Weak Japan Markit PMI keeps focus on post-tax-hike slump.