JPY Trading Outlook (13-10-2014)

USD/JPY A bit of calm returned on Friday after Thursday’s somewhat angst-ridden asset liquidations that lifted the yen broadly, but far more so on the crosses. As a result, USD/JPY prices managed to tuck themselves inside Thursday’s fairly modest range, while leaving untouched nearly 3bln of 107.50 expires and the stops below the daily Tenkan at 107.39. There was some paring of losses in USD-JPY yield spreads from o/n lows, but Nikkei futures remain near their lows as the NorAm session starts to wind down. EUR/JPY, on the other hand, is making new intraday and Oct lows as we write, with the Sep low at 135.82 now nearby. Despite Eurogroup chairman Dijsselbloem mooting a more coordinated approach to reviving economic growth potential, few see a workable plan coming together quickly enough to right that listing ship, nor is the ECB’s ABS/CB plan seen as a game-changer. EUR/JPY is flirting with its weekly Cloud base at 135.31 with the Tenkan & Kijun bearishly aligned above. AUD/JPY is now well below its 200-DMA looking even gloomier after China slapped trade tariffs on coal imports. GBP/JPY eyes last month’s lows.