JPY Trading Outlook (29-08-2014)

USD/JPY The correction of the overbought USD/JPY this week finally took prices to the 200-HMA ahead of the NY open amid worrying headlines from Ukraine that tripped stops below Tues’s 103.75 low. Better-than-expected US GDP revisions buttressed the recovery from the 200-HMA, as N225 futures and Tsy yields rebounded. Exporter and spec profit taking offers are scattered between 103.85 and the Tues-Wed highs by 104.17. Overbought daily techs just today began to roll over, so still risk that the 38.2% of the 101.51-104.49 rise and the daily Tenkan at 103.35 will eventually be tested. Huge 102-103.25 expiries Fri. Weekly MOF flows showed the slow-but-steady outbound flow into foreign equities persisting, though bond flows revered the previous week’s investment. Abe’s new cabinet is gnashing some teeth over this yr’s decision whether to raise the sales tax again next yr. Still working out the residual damage from April’s hike. Kitchen sink of Japanese data releases tonight, including some early Aug CPI readings from Tokyo. BOJ’s on hold at least until Oct regardless. EUR/JPY fell again on soft EZ data & Ukraine woes, despite doubts about more ECB easing next Thur.