JPY Trading Outlook (29-09-2014)

USD/JPY From Asia lows that held just above the 200-HMA, USD/JPY climbed to and through the Jan 19 prior peak at 109.46 and cleared the 109.50 barrier with HF help. Rising short-term US rates and a rebound in stocks from Thur’s big dip fueled the advance. Playing supporting roles were the o/n MOF weekly investment flows showing Japanese bought net Y774b of foreign bonds and Japan’s Labor Min dispelling rumors that GPIF reform might be held up due to delays in legislation. Another round of barrier defenses and exporter offers are touted into 110. Note that prices are at the top of a 3 std dev band around the linear regression from the 1998 peak. The Fed’s clearly growing concerned about a runaway USD rally becoming a backdoor tightening that could delay or attenuate policy normalization. 110.67 is the next historical hurdle. EUR/JPY slide was interrupted near the rising 21- & 100-DMAs and by the resumption of the USD/JPY uptrend. ECB speakers continue to claim they’ll be able to expand their balance sheet more rapidly after the AQR is over, but doubts persist about that and public QE. Big JPY data day Monday, US NFPs Fri.