Last night’s decent set of Chinese data may have drained some measure of safe-haven support, but theYen has been able to shake off overnight pressure and is posting moderate gains this morning. Comments fromDeputy Governor Iwara that the BOJ is “ready to act” if their 2% inflation target is threatened, may also have beena fresh reminder to the market that they have further room to ease Japanese monetary policy. With the Dollarlikely on the bench as a safe-haven destination, and with Japanese equity markets showing signs of losing steam,the Yen is likely to extend yesterday’s sharp rebound. The December Yen may climb up above the 102.52 level tofinish out this week, but it is likely to have limited upside from here if global risk appetites continue to mend.
Technical Outlook
JPY (DEC): The cross over and close above the 60-day moving average is an indicationthe longer-term trend has turned positive. Momentum studies trending lower at mid-range could accelerate a pricebreak if support levels are broken. The cross over and close above the 18-day moving average is an indicationthe intermediate-term trend has turned positive. A positive signal was given by the outside day up. A positivesetup occurred with the close over the 1st swing resistance. The next downside target is now at 100.57. The nextarea of resistance is around 102.86 and 103.34, while 1st support hits today at 101.48 and below there at 100.57.