JPY Trading Outlook (09-09-2014)

USD/JPY More bad Japan econ news today indicates Abe’s resistance to a planned consumption tax rise next Oct is building, as is pressure on the BOJ to lower their growth and inflation f/c and consider QQE2. Q2 and early Q3 Japanese data (more tonight) indicate the hang-over from this April’s tax hike is far worse than expected. Without the BOJ upping the QQE ante, the reflation trend could be at risk. USD/JPY, which had been consolidating its uptrend following soft US NFPs Fri, only got back to 104.86 before resuming the uptrend and making fresh 6-yr highs in NY. Those highs were helped along by a SF Fed research report that concluded the markets are not pricing in all the rate hikes implied by Fed’s forward guidance and seem ill-prepared for a rise in volatility. That and renewed worries about the direction of the Japanese and European economies, this time with a Scottish independence threat kicker, made the USD the default winner. Commodity/EM currencies also got hammered by the USD. 106 barriers and stops beyond remove, and not much else until 108. EUR/JPY capped by Tenkan, Kijun & 50% Fibo. GBP/JPY is finally well below its 200-DMA now.