Positive inflation data at home and flight-to-safety flows from abroad lifted the Yen to a fresh 21/2-weekhigh, but the inability to hold above the 103.00 level may not bode well for later in the session. Japanese CPIcontinues to post positive year-on-year results, but was once again the Yen was “helped” by higher energy pricesthat are a concern to their economy since they have to import a large portion of their non-nuclear fuels. Given thesharp losses in Japanese equities last night, this morning’s modest early gains may be an early sign that a neartermpullback may be close at hand. The December Yen may find support around the 102.78 level, and will belooking for weak US data this morning in order to hold its ground in positive territory.
Technical Outlook
JPY (DEC): Stochastics are at mid-range but trending higher, which should reinforce amove higher if resistance levels are taken out. The market’s close above the 9-day moving average suggests theshort-term trend remains positive. With the close higher than the pivot swing number, the market is in a slightlybullish posture. The next upside target is 103.24. The next area of resistance is around 103.06 and 103.24, while1st support hits today at 102.58 and below there at 102.28.