JPY Trading Outlook (27-02-2015)

USD/JPY Rising Tsy yields served the USD well against the JPY and most ccys Thur, after Real Weekly Earnings were reported up 1.2% m/m vs a 0.3% rise f/c; news that eclipsed the mixed overall and core CPI results & Claims rise. USD/JPY was already ready for a rebound after being unable to retest Wed’s lows before the NY open. Yet another week of Japan buying of foreign stocks and bonds reported o/n and another strong Japanese stock market rally had already reduced the risk longs taken above the 21-DMA and Kijun would be stopped out. With large US retailers in somewhat of a bidding war for labor and the US jobless rate already near historically low levels, the mkt is slowly assuming that even the Yellen-led Fed will need to raise rates later this year. The BOJ is clearly on hold for now, but once last April’s VAT hike drops out and the BOJ’s 2% CPI target begins to look even less likely by ’15-16 FYE, the BOJ might be forced into a QQE3 around the time the Fed begins to raise rates. Offers at 119.50 slowing gains for now, but better supply is by 120 and then the dn TL off the late Dec, early Jan and Feb highs, Fri at 120.37. Huge JPY data slate Friday.