The December Yen continues to be driven by the ebb and flow of safe-haven support, and is finding significant pressure early in today’s trading. Positive vibes from China and the Euro zone have weakened the Yen this morning, although sluggish Japanese equities will remain a source of flight-to-safety support until they find better visibility on potential corporate tax cuts. The Yen will hold the upper hand on the Dollar as a safe-haven destination as long as Washington budget acrimony dominates the marketplace, but it may be difficult to hold onto recent gains if and when global risk sentiment regains its footing. The December Yen may recover back towards the 102.52 level later this morning, but further upside may be limited unless global risk appetites take another nosedive due to events in Washington.
Technical Outlook
JPY (DEC): Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend. It is a mildly bullish indicator that the market closed over the pivot swing number. The near-term upside target is at 103.62. The next area of resistance is around 103.25 and 103.62, while 1st support hits today at 102.26 and below there at 101.63.