JPY Trading Outlook (15-08-2014)

USD/JPY An unexpected rise in US Jobless Claims provided a short-lived USD/JPY discount to the 200-HMA for latent bulls to scoop up in NY. The mkt focus initially was on the drop in Tsy yields, but the lower yields soon enough tempted fresh equities buying, including N225 futures, which still have a 0.65 60-day correlation to USD/JPY, down from 0.90 in Feb. Japanese data o/n remained apiece with others of late suggesting more need or room for the yen to slide, either on its own merits or as a result of QQE2 by the BOJ. The latter still looks a tad implausible or superfluous given how low JGB yields are and how little impact they’ve had on domestic loan growth. The the Qual part of QQE still holds some appeal. Regardless, Obon is upon us and the markets are focused more on the US and Europe now. A string of higher USD/JPY daily lows and highs since Fri has some specs chasing prices with rising bids. A daily close above 103 is needed to convince M-T bears & some exporters that they needn’t rush their offers. EUR/JPY breached, but may not close above, its Kijun at 137.20 today. Cloud looms in mid 138.00s. AUDJPY’s 200-DMA rebound has run into the 50-DMA.