JPY Trading Outlook (14-10-2014)

USD/JPY Despite a feeble mid-day attempt to rally (along with stocks) USDJPY remained heavy under the weight of sharply lower US short rates and a weak Nikkei. Fed Vice Chair Stanley Fischer joined the chorus of worriers at the weekend’s IMF meeting, suggesting that rate hikes are further off than currently expected. Yen was quiet in NYC despite the fact that Nikkei futures are being hammered below 15k (-2.6%). Bulls are trying to hold 107.00, which was roughly where the pair was on Sep 17 when the Fed ratcheted up the Dot Plot and sent the USD on a run higher. Technical support in major equity indices is falling and will create a demand for yen as carry gets unwound.