The December Yen has been through a bumpy overnight session, but still finds itself somewhat on the defensive coming into this morning’s trading. Comments by Prime Minister Abe at the NYSE encouraging Wall Street to invest in Japan and that his nation’s economy is “exceptionally good” provided a decent boost to Japanese equities last night, and along with ramped-up speculation of a corporate tax-cut that has helped to shift safe-haven flows across the Pacific and into Dollars. Japanese inflation levels remain a key hurdle for the Yen to overcome, as aggressive BOJ easing measures will be needed well into the future in order to reach their 2% target level. The December Yen may slide back towards the 101.24 later this morning, as last night’s steep reversal from weekly highs may be an early sign that a fresh downside leg may be about to begin.
Technical Outlook
JPY (DEC): Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market setup is supportive for early gains with the close over the 1st swing resistance. The next upside target is 101.99. The next area of resistance is around 101.85 and 101.99, while 1st support hits today at 101.41 and below there at 101.10.