JPY Trading Outlook (14-08-2014)

USD/JPY Doubts about domestic demand in Japan, lingering concerns about growth in the EZ, a halving of the BOE’s wage growth f/c for this year and a downside miss from US Retail Sales left the mkts with the impression that major CBs will be easier than expected for a while. That was positive enough for risk to keep Nikkei futures gains from o/n intact and to allow a drop in Tsy yields to be largely shrugged off by the USD/JPY. The initial response to poor US RS data was a further pullback from the o/n high at 102.52 (61.8% of the 103.15-101.51 slide) to pre-London lows and the hourly Cloud top in the lower 102.20s. The pair went on to run light stops above 102.52 by midday and then flattened out. Large 102 expiries Thur and offers into and above 103 may dampen trade into the Obon holiday. A daily close above 103 is needed to convince traders there are better odds of the 105.45 Abenomics highs being retested before this year’s lows at 100.68. EUR/JPY’s trying to make an oversold base, but’s so far stuck below the Kijun at 137.25. GBP/JPY’s post BOE dive has yet to break Fri’s low. AUD/JPY’s 200-DMA rebound accelerated. MOF flows & Machine Orders tonight.