JPY Trading Outlook (14-01-2015)

USD/JPY Falling USD-JPY yield spreads since late Dec have left USD/JPY struggling at times when rising N225 futures would normally have given prices a nice push into positive, as was the case in early NorAm trading today. N225 futures made new session highs, but USD/JPY couldn’t reach the late Asia peak at 118.85. Offers capped the pair at 118.77 as the hourly Cloud weighed on prices for a third straight day. Stocks, commodities, Tsy yields and USD/JPY all fell back after the Ldn close and USD/JPY posted a new session low at 117.52, with offers now trailing down to around 118. Prices falling into the daily cloud is somewhat bearish, despite the Tenkan remaining above the Kijun thus far, but the Kijun has now begun to fall into the Cloud, which doesn’t bode well at all. The Dec low at 115.65 by the 38.2% of the Oct-Dec rise at 115.50 is back in play. Reuters reported sources close to the BOJ as looking to follow the Abe govt’s lead yesterday by lowering their FY 15 CPI target to reflect tumbling energy prices. EUR/JPY’s breakdown Mon below 200-DMA & 61.8% supports left it on the slide today toward a 137.15 Fibo-projected base. JPY Machine Tool Ords tonight.