JPY Trading Outlook (15-09-2014)

USD/JPY A huge week for USD/JPY bulls is coming to its conclusion with prices pinned again the up TL drawn across last year’s lows, last by 107.40, and at fresh 6-yr highs. US Retail Sales were on target, but July was revised up, but this did little for USD/JPY. Softness in stocks and most of the Tsy yield gains happening out the curve, not within the policy horizon, also helped to limit persistent USD/JPY demand. Talk of profit objectives at 107.40-50, stops above there and more P/T at 108. Bids kept today’s lows close to 107.00 in a week were the pair gained 2.2%. Impressive. Numerous O/B levels are seen, but still no clear tops or bearish divergences. Next week’s Japanese Trade Deficit report will be a key local focus, while the Fed meeting, with its SEPs & Presser will be center stage. EUR/JPY blew beyond its 38.2% of the Mar-Aug slide at 138.81 after clearing the 100-DMA o/n. The advance extended in NorAm trade after EUR/USD cleared its 5-day highs at 1.2963, triggering buy stops. The 233-DMA, 50% Fibo & 200-DMA are the next hurdles, last at 139.26/76/85. Japanese foreign asset buying, BOJ QQE & trade deficits are the main yen drags.