The Yen remains in a negative track on the charts despite initial noted weakness in US equities andresidual uncertainty flowing from China. Comments from the BOJ overnight suggesting that last year’s easingmove is “steadily producing positive effects on the Japanese economy” has given the Yen a fundamentaljustification for tracking lower. In fact, deflation fears in Japan might have been diffused further by other BOJcomments that suggested Japanese wage growth was now outpacing inflation! With less angst toward China andpositive US data later this morning, the June Yen could retest the recent consolidation lows of 96.73.
Technical Outlook: The close below the 40-day moving average is an indication the longer-termtrend has turned down. Stochastics are at mid-range but trending higher, which should reinforce a move higher ifresistance levels are taken out. The intermediate trend has turned down with the cross over back below the 18-day moving average. The close below the 2nd swing support number puts the market on the defensive. The nextupside objective is 99.21. The next area of resistance is around 98.31 and 99.21, while 1st support hits today at96.97 and below there at 96.52.