JPY Trading Outlook (24-10-2014)

USD/JPY Only the poor Kiwi couldn’t make ground on the yen today amid further unwinding of haven trades (yen sales) from earlier in the month. Japan’s PMI beat o/n set the tone for mostly upbeat data and re-risking, even though the US Markit PMI missed (most other US releases were firmer than f/c). Tsy yields surged with stocks, and lifted USD-JPY yields spreads. A DJ story that the BOJ may view the M-T slide in energy prices as putting downward pressure on Japan’s CPI, perhaps bringing it below 1% temporarily, was another reason for yen sales, but there was plenty of stop-loss and trend-following buying in USD/JPY above 107.64, the daily Kijun & 50% of the 110.09-105.20 slide. Japanese exporter offers into 108 slowed the advance for a bit, but that and the 61.8% Fibo at 108.22 were cleared in time. There’s an ABC measured objective at 108.44. A close above the 108.22 Fibo would suggest a retest of the upper 21-day Bolli by the Oct peak is next. EUR/JPY retested Mon’s 137.00 high, but so far only got 1 pip above it. EZ banks got their AQR results today, and so far we’ve only heard about passes that some feared would be fails. 137.68 is key tech rsst here.