JPY Trading Outlook (20-02-2015)

USD/JPY reverted to its 21-DMA at 118.42 O/N and in the aftermath of Wed’s FOMC Minutes that sent Tsy yields sharply lower. Further consideration of those Minutes began to steady yields and the USD as most downplayed the dovish bias as having been before the stellar Jan Jobs report. Speaking of jobs, weekly Claims retreated to 283k fm 304k last week, and below 290k f/c. The results would have been lower still save for higher claims in fracking states like Texas, ND, etc. Of course problems in the energy sector can’t be ignored, particularly given the historic crude build reported this week, on top of already swelling inventories. Philly Fed was a bit of a disappointment, but Tsy yields managed to claw back some of Wed’s losses, putting a bid under USD/JPY at 118.80. The USD2.5b 119 expiry at 10ET also attracted prices. Japanese Trade & Tankan data were encouraging, as was last week’s Japanese buying of foreign bonds, though economic improvement will give the BOJ less reason to launch QQE3. Key yen crosses merely consolidated gains from earlier in the week. Japan and other PMIs are the econ release focus Friday.