JPY Trading Outlook (25-11-2014)

USD/JPY stops were run below 118 in Asia, only to have buy stops run above 118 ahead of the NY open. USD/JPY rallied to a 118.485 session high by the middle of the NY morning, with talk of real money buying underpinning the move. There is every expectation that GPIF et al will resume their foreign asset buying after a lull the previous week. Below f/c US data, second-tier as it was, kept USD/JPY bidding contained. Japan returns from holiday tonight with a bang. BOJ Minutes and a Kuroda speech/Q&A should provide some interest, though after the 8/1 vote at the last meeting we doubt any sea changes will be revealed. The focus now is how Abe’s coalition hold up in next month’s snap election. In the interim, QQE2 and GPIF reallocation will keep the yen a favored sell, particularly vs the USD and any others with CBs not on the cusp of aggressive easing. 119 remains the topside pivot for USD/JPY. Light stops are set above 118.50. EUR/JPY is technically top-heavy after Friday’s bearish close. Today’s 147.32 high is by the hourly Cloud top and 50% of the 149.12-145.59 slide.