JPY Trading Outlook (11-09-2014)

USD/JPY The yen was sold far and wide Wed, but it was particularly punished by the pound and the CAD, but not the other two commonwealth currencies down under. More Tsy yield gains, below-f/c Japanese data and BOJ’s Iwata downplaying the net impact of yen weakness and a catch-up rally in the Nikkei o/n have USD/JPY nearing 107, with the up TL off the May ’13 & Jan ’14 highs a tech hurdle at 107.36, though 108.04, the Sept 19, 2008 rebound high, is the next historical hurdle and closer to some IB targets. CAD/JPY cleared the dn TL from ’13 high, a 76.4% of the preceding ’14 range and the top of a rising channel begun in March in the 97.12-26 range today. USD/CAD fell back after only fleetingly clearing its 61.8% hurdle at 1.1027 on Tues and despite yet another thrashing in oil prices amid a Saudi production cut announcement. EUR/JPY again breached the daily Cloud top, but won’t close above it. Beyond yen weakness and a touch of EUR p/t, there may be some betting EZ fiscal policy will ease enough to take some of the pressure of the ECB. Mersch noted w govt rates already this low QE might not do much good.