JPY Trading Outlook (22-01-2015)

USD/JPY The JPY rallied in Asia, while stocks were sold, after BoJ left policy mostly as is (loan programs expanded) and cut its CPI f/c, thus making the FY15 2% CPI goal no longer the central expectation. The CB tweaked its growth f/c up beginning in FY 15/16. The BOJ is trying to look through low oil prices, but they will need better economic growth over the next qtr or two to refrain from pulling the qualitative easing trigger again. The 118.80 high stalled by Tues’s 118.87 high and good offers below the 21-DMA & 61.8% of the 120.82-115.85 slide at 118/92/96, as well as 119 defenses. Weak stocks took USD/JPY to a NorAm low of 117.18, but decent US Single-family Housing Starts & the BOC rate cut lifted quotes. That rally ran out of steam shy of the hourly Cloud top & 61.8% of the 118.87-117.18 slide. EUR/JPY tested the 61.8% of the recent 134.70-137.64 recovery by 135.82 in Asia and in late Ldn. CAD/JPY tumbled on the BOC’s rate cut, with 94.34-36 next L-T supports. Weekly Flow data tonight, but all eyes will be on the ECB meeting Thursday.