JPY Trading Outlook (20-11-2014)

USD/JPY Despite a brief setback after the FOMC Minutes had a dovish tone to them, and Tsy yields dipped briefly, USD/JPY remains on an upward path, driven by QQE2 and GPIF asset reallocation. QQE2 was solidified by the BOJ’s 8/1 vote backing it at the just-ended policy meeting. Moreover, assuming the LDP-led coalition win the Dec 14 election, the reflation efforts will persist and perhaps even intensify if growth and inflation do not rebound as hoped next year. Barriers at 118 were removed after the Minutes, along with the Oct 2007 swing high at 117.95. Probing for stops above 118.10 at this writing. The broader 120 target and the pre GFC peak at 124.14 are the broader objectives. Yen crosses, save for the falling AUD & NZD, were dragged higher by the yen’s slide, while GBP/JPY got an extra lift from less dovish than expected BOE Minutes. That cross is pressing against 185 heading toward the NY close. EUR/JPY plied new trend highs of 148.10 after the Minutes release, but EUR/USD sank faster than USD/JPY gained after that, at least so far. There isn’t much historical resistance until the 152 vicinity. Weekly flows & Trade data from Japan tonight.