After reaching a fresh monthly low last night, the Yen has also seen a significant turnaround during theovernight session and comes into this morning with sizable gains. The likelihood that Fed tapering has beenpushed back until well into 2014 will reinforce the Yen’s safe-haven credentials, although Japanese equities havemaintained their winning streak and are likely to diminish flight-to-safety flows from home. Unless there isconsistent improvement with Japanese economic readings, particularly from the inflation front, the Yen will stillhave to contend with the BOJ’s aggressive easing measures well into the future. The December Yen may bounceback to the 102.34 level after today’s US data window, but will stay well below the early October highs now thatWashington budget uncertainty has been concluded for this year.
Technical Outlook
JPY (DEC): The major trend has turned down with the cross over back below the 60-daymoving average. Daily stochastics declining into oversold territory suggest the selling may be drying up soon. Anegative signal for trend short-term was given on a close under the 9-bar moving average. The close below the1st swing support could weigh on the market. The next downside objective is 100.54. The next area of resistanceis around 101.73 and 102.26, while 1st support hits today at 100.87 and below there at 100.54.