JPY Trading Outlook (24-02-2015)

USD/JPY was one of least interesting yen pairings today as traders braced for tomorrow’s testimony by Yellen and got only soft, but second-tier, US econ data to chew on ahead of that. BOJ Minutes and Abe advisor comments bolstered the notion QQE2 will be left alone for the next few months at least. Meanwhile, the steady erosion of the net spec short JPY positioning the past few months is being largely offset by Japanese pension demand for foreign assets, led by GPIF. EUR/JPY gave back a big chunk of Fri’s whiplash recovery gains on Greek hopes. The reality of the Greek extension is less glamorous than some had perceived it to be on Friday. The next chapter in this drama was delayed until Tues, when the Greek govt is to deliver its new “letter” to the troika a day behind the new schedule. The two sides have until the end of April to sort it out. GBP/JPY shrugged off poor CBI data to reach a 184 high, just shy of the 61.8% of the Dec-Feb slide at 184.24 that has capped Feb rally attempts thus far. CAD/JPY and other commodity crosses got a fleeting lift on an FT story about a potential emergency OPEC meeting. Fri is the next big Japan data day.