JPY Trading Outlook (09-02-2015)

USD/JPY The US NFP report was such a big beat overall that it sent Tsy yields surging enough to push USD/JPY to its highest since Jan 12. The 119.23 high, vs the day’s 117.17 low, stopped right by the daily Cloud top and the down TL off the Dec & Jan highs at 119.27. The upper 21-day Bolli was pierced at 119.10; the first time it’s been touched since the Dec 8 trend high at 121.86. Despite the stellar US jobs report, the first full 25bp rate hike is still not priced in until July. Sideways-to-lower USD-JPY 2-yr yield spreads have been the main drag on USD/JPY prices since Christmas, counteracting a decent rise in the N225 over that span. N225 futures today climbed to 17,950, nearly retesting the Dec peak at 18,115. If upcoming Jan US data, namely the Feb 12 Retail Sales report, tend to reinforce today’s good news and the N225 can make new trend highs, the stage will be set for USD/JPY to at least retest the late Dec high at 120.82. EUR/JPY was dragged higher by the yen fall after the US news, but remains thwarted by offers above 135. GBP/JPY cleared key MA & Fibo hurdles. UK Political fears persist, but techs pt to 184.23 next. JPY Q4 GDP due Feb 15.