JPY Trading Outlook (02-02-2015)

USD/JPY For the sixth time since the Jan 20 breakdown session, USD/JPY ran into bidders, or out of sellers, in the low 117.00s, with today’s 117.30 low the byproduct of a weak US GDP report, but helped along by derisking related to Greece and in the wake of yesterday’s Reuters story suggesting the BOJ and some advising the Abe govt are wary about further QQE efforts to weaken the yen. Falling Tsy yields and stocks (N225 futures, too) were not enough to break the recent USD/JPY stalemate, but the daily and weekly charts both have bearish casts. And while Meiji Yasuda Life announced a tripling of its “new areas” investment over the next 3.5 yrs, Japan pension and other investment flows abroad are likely to be tepid in the final qtr of the FY, particularly as govt yields in the US and other majors tumble. A nasty short-squeeze in oil prices after the Baker Hughes rig count fell was a slight negative for the yen toward day’s end, as falling imported energy prices have lowered Japan’s trade deficit and helped offset the yen’s fall that inflated import prices generally. EUR/JPY struggled amid dour Greek HLs & is probing the last two days lows into the close.