JPY Trading Outlook (11-11-2014)

USD/JPY Long USD profit-taking in the wake of Fri’s NFP report ran out of steam in London today, in part because the USD/JPY pullback from Fri’s 115.60 peak to today’s 113.86 low gave traders a chance to buy at last Wed’s levels. In the post QQE2/GPIF world, and with no serious change in the Fed outlook, that was all macros needed to scoop up the ltd dip below 114. Bidding was steady and CTA led in NY, driving prices into, and eventually through the hourly Cloud in the 114.80s. Yield spreads & N225 gains are providing the fundamental lift. There was a Nikkei story out in the NY afternoon about possible continuing dissent at the BOJ re QQE2, but it looks unlikely this group will be able to reverse the new easing. Kuroda has a core cadre of QQE believers and is likely to get another one next summer when one of the committee members is replaced. At any rate, it would be a spectacularly slap in Kuroda’s face to not give QQE2 at least a few qtrs to either sink or swim. Japan has Trade, C/A, & Consumer Confidence releases tonight. There’s a US holiday Tuesday. The path of least resistance is higher for USD/JPY and the crosses.