The September Yen was able to bounce back from overnight pressure and avoid posting a fresh 3-week low, but has seen little upside follow-through early this morning. Japanese equities were generally subdued last night while Asian emerging market currencies remain near multi-year lows, both of which helped the Yen from sinking further to the downside early this week. Japan’s Economy Minister reported that a decision will be made on a potential sales tax increase by early October, however, which may keep the “Abeconomics” program on track and remove some uncertainty from Japanese and global markets. Unless there is a fresh inflow of flight-tosafety support, the Yen is likely to reach a new low for this down move in front of key Japanese economic data later this week. The September Yen may find support around the 101.22 level later today, but with today’s quiet markets it should stay clear of last Friday’s lows for the move.
Technical Outlook
JPY (SEP): The moving average crossover down (9 below 18) indicates a possible developing short-term downtrend. Daily stochastics are trending lower but have declined into oversold territory. The close below the 9-day moving average is a negative short-term indicator for trend. The market tilt is slightly negative with the close under the pivot. The next downside objective is now at 100.51. The next area of resistance is around 101.73 and 102.08, while 1st support hits today at 100.95 and below there at 100.51.