JPY Trading Outlook (23-10-2014)

USD/JPY Cross-currents affected the yen pairs today: USD strength and increased intraday derisking chief among them. A broadly stronger USD and some firming on the USD/JPY technical front gave that pair a lift to 107.38, a tick below Monday’s high that offers were placed by. Macros were doing the bulk of the buying, largely on the CB balance sheet play, but risk-driven traders covered some yen shorts amid the attack in Ottawa and a fresh tumble in crude prices after another big build in US inventories. The N225 futures ceded some of their intraday gains and US stocks went from decent gains to losses. Tsy yields were pretty steady with today’s CPI report not changing the Fed outlook. USD/JPY traded wholly above is daily Tenkan line (106.67) for the first time since Sept 30, while the daily Cloud top rises, Thur to 106.23. Beyond offers at 106.40-50, key tech resistance is by the daily Kijun & 50% of 110.09-105.20 at 107.64. One-month vols off again today as something a stalemate between the re and de-risking camps is waged. EUR/JPY and most other yen crosses struggled as risk receded during NorAm trading. Oct Markit PMI is out tonight w weekly flows.