The September Yen made another attempt to climb past the 103.00 level during overnight trading, but has slid back towards unchanged levels this morning. Although Japanese equity markets finished a turbulent week on the defensive, the Yen is finding little lasting safe-haven benefit going into the weekend. Uncertainty with potential Japanese corporate tax cuts may have ramped up the Yen’s flight-to-safety appeal, but is unlikely to provide any longer-term support unless Japanese officials remain indecisive on the fiscal policy front. As long as today’s US data can avoid any negative surprises, the Yen is unlikely to retest the overnight highs during today’s trading session. The September Yen may find support around the 102.40 level later in the session, and could see further downside if global risk sentiment continues to improve.
Technical Outlook
JPY (SEP): Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The market’s close above the 9-day moving average suggests the short-term trend remains positive. A positive signal was given by the outside day up. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. The next downside objective is now at 100.83. The next area of resistance is around 103.73 and 104.26, while 1st support hits today at 102.01 and below there at 100.83.