JPY news - page 28
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Japan December monetary base +23.1% y/y (vs. +22.3% expected)
Priors 51.8 and 52.0 respectively
Japan data - December Nikkei Services PMI 52.3 (prior 51.8) & Composite 52.8 (prior 52.0)
Japan data - November Labor Cash Earnings: 0.2% y/y (expected +0.2%, prior 0.1%)
Wages data from Japan for November
USD/JPY forecast for the week of January 9, 2017
The USD/JPY pair went back and forth during the week, but as you can see found quite a bit of support at the 115 level below. That’s an area where buyers should be attracted, because it was so resistive previously. The fact we ended up forming a massive neutral candle suggests to me that the buyers are willing to fight for this pair, but we are overextended on just about every metric that I can think of. Pullbacks continue to offer value and I believe that longer-term this market reaches towards the 125 handle.
Japan (Nov. prelim) Leading index: 102.7 (expected 102.6) & Coincident 115.1 (expected 115.0)
Preliminary November indices from Japan
Japan data
BoP Current Account Adjusted: Y 1799.6bn
Trade Balance BoP Basis: Y 313.4bn
Also, Bank Lending excluding trusts December, y/y: 2.6%
& Bank Lending including trusts y/y: 2.6%
USD/JPY: Turning Bearish N-Term Targeting 113
USD/JPY – BEARISH BIAS – (113.00-116.00)
Market expectations for expanded fiscal spending in the US have diminished and US Treasury yields have fallen following speeches by the outgoing and incoming presidents this week. This in turn has driven USD/JPY to the 114 level. Japanese investors have begun their usual seasonal cash repatriation. Japan has reported current and trade account surpluses, which could weigh heavily on USD/JPY topside at around 116.
But the US-Japan yield gap would theoretically keep the lower bound at around 113-114. The lower bound could also be supported by JPY selling pressure triggered by FX exposure to reduce hedge trading, as well as by reflationary momentum still above the make-or-break mark of 50 according to the Economy Watchers Report.
source
USD/JPY forecast for the week of January 16, 2017
The USD/JPY pair broke down during the week, and even managed to get below the 115 handle. However, we are starting to see a significant amount of support here, so I think the market is going to try to build a bit of a floor in this general vicinity. Because of this, I still prefer the upside but I think we may need to bounce around or chop around a bit before we can hang onto a position. You may be better served off of daily charts currently.
USD/JPY: Where To Buy The Dips?
The market is unwinding USD/JPY longs initiated on the premise of US reflation, offering cheaper levels to reinstate fresh longs. The Treasury market remains too cautious regarding the Fed pace ahead, whereas the BoJ won’t tolerate exacerbated yen strength.
To attribute the fall in USD/JPY from 118 to 114 as ‘noise’ isn’t very helpful, but beyond pointing out that more growth and less deflation would suit PM Abe just fine, I still think the drivers of USD/JPY are mostly whether the BoJ can hold real yields down and US real yields can resume their uptrend. If so, the only question is where to re-sell the yen.
...Past patterns suggest that the USD/JPY could revisit 112-113 in the near-term, before bouncing back towards - and probably beyond - the recent 118 high.
source
USD/JPY Weekly Forecast January 16-20
USD/JPY continued to correct lower in the past week as the Trump press conference acted as a catalyst for a break below significant support. The bulk of last week’s fluctuations were politically driven and volatility is expected to be elevated in the upcoming week with market moving economic risk events and the Donald Trump inauguration providing a political driver once again.
The Trump press conference on Wednesday disappointed Dollar bulls as there was a lack of discussion surrounding fiscal policy. Expectations built ahead of the event with a push higher in the Dollar while the reversal during the press conference served to take the pair below a horizontal level at 115.49 on a sustained basis. The Presidential inauguration will tend to introduce a similar environment as the markets will once again look to Trump’s speech for forward guidance on expansionary fiscal policy and tax reforms.
The 115.49 level marks a spike low from December 2014 and a support zone is seen between the level and 116.08 as the latter reflects the 2015 low. The technical break sets a bearish tone for USD/JPY but fundamentally, Trump’s speech in the past week did not change the broader outlook for the US economy. The same drivers that elicited the rally dating back to the election will tend to keep the pair supported.
There is some expectation for the momentum to slow in USD/JPY as positioning has played a large part in price action during the fourth quarter of 2016. At the start of the quarter, the Japanese Yen was the second largest net long held among non-commercials, falling only behind the Greenback, as per the commitment of traders report. The position unwinding combined with the urgency in positioning short has been a big driver for momentum in the USD/JPY rally. The latest data indicates the Yen net short position is now roughly equal to the net short position held in the Euro, although this was partially attributed to a significant position squaring in the Euro. The latest report indicated the Japanese Yen was held net short by $8.6 billion in the week to January 10th, down $0.6 billion from the prior week. The Euro was held net short by $8.7 billion during the same period, maintaining its position as the largest net short held among the majors by a slim margin.
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