JPY Trading Outlook (12-12-2014)

USD/JPY A 2% recovery in USD/JPY from today’s 117.45 low began with rumored PKO in Asia and extended to 119.55 in NorAm trading after US Retail Sales beat f/cs across-the-board. The robust spending data (70% of USD GDP derives from consumer spending) sent Tsy yields higher and flatter and drove equities, including N225 futures, to session highs by early afternoon in NY. USD/JPY, by then intraday O/B, ran into offers ahead of the daily Tenkan, the 200-HMA & 50% of the 121.86-117.45 slide, all by 119.65. Uncertainty about the US CR to fund the govt and lingering pre-y/e position squaring look to have trimmed gains late in the day. GBP/JPY also recovered well, but was unable to reach Wed’s high before slipping late in the day. A renewed, hard fall in oil prices took WTI below 60 and touched off another smaller round of EM-led derisking. AUD/JPY’s low came on the AFR story the Stevens was looking for 75. EUR/JPY’s marginal break below Wed’s low o/n was a bear trap, with prices squeezing back above 148, though also failing to retest Wed’s high or the Tenkan nearby. IP/CU from Japan tonight, but China’s data dump may be the bigger event risk. Huge 120 expiries Fri.