The December Yen has come through a choppy and volatile overnight session with sizable gains, and for the moment continues to be the safe-haven destination of choice. Last night’s Tankan survey showed improved sentiment for both big and small manufacturers, and more than offset a surprise jump in Japanese Unemployment. While Japan will formally go ahead with a sales tax hike, comments by Prime Minister Abe regarding corporate tax cuts have been well received by the market and have helped to reinforce this morning’s early strength. As long as Washington budget problems hang over the global marketplace, the Yen should hold the upper hand on the Dollar. The December Yen may climb up towards the 102.50 level, but will need to see a continuing sense of risk aversion through global markets in order to build onto these recent gains.
Technical Outlook
JPY (DEC): Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The market’s short-term trend is positive on the close above the 9-day moving average. The daily closing price reversal down is a negative indicator for prices. The market has a slightly positive tilt with the close over the swing pivot. The near-term upside objective is at 102.94. The next area of resistance is around 102.26 and 102.94, while 1st support hits today at 101.26 and below there at 100.93.