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USD/JPY

USDJPY Off 100 Week MAVG

The record Current Account deficit weakened the Yen, however the USDJPY pair has not been able to break through the 100 week moving average. A break above the indicator/38.2%/trendline resistance could put 2009 USDJPY levels into play into the new fiscal year in Japan (3/31 year end in Japan).

Japan’s Q4 GDP

The USDJPY pair momentarily caught a light bid following continued terrible numbers out of Japan, as their economy shrinks and deflates. The details are as follow:

  • GDP Deflator (YoY) – Survey:-1.6%   Actual:-1.8%   Prior:-1.6%
  • Nominal GDP (QoQ) – Survey:-0.3%   Actual:-0.5%   Prior:-0.8%
  • GDP Annualized (YoY) – Survey:-0.6%   Actual:-0.7%   Prior:-2.3%
  • GDP (QoQ) – Survey:-0.2%   Actual:-0.2%   Prior:-0.6%
  • Current Account Total – Survey:-320B   Actual:-437.3B   Prior:303.5B

The USDJPY is above 100 day MA. Taking steps higher

The USDJPY has moved above the 100 day MA at the 77.30 level.  Moving above this level is positive for the pair.   The 77.539 is the next target. Traders have been disappointed before in false breaks in the USDJPY, but the move higher today has been more steady (vs a spike). It started by holding the 100 hour MA and has progressed step by step higher.  Nevertheless, it is important to define risk. Risk, as I see it,  comes in at 77.21 which is the 38.2% of the  move higher today (see chart below). 

USDJPY Above 79 Approaching 200 day

The USDJPY pair flew up almost 4 big figures as the Bank of Japan intervened and sold Yen. Finance Minister Azumi commented that the move was unilateral although he didn’t elaborate on the size of the intervention. The Finance Minister added that the action was taken to due to strong signs of speculation, his view being that the price of Yen does not all reflect the fundamentals. On the chart below we see the pair is approaching the 200day moving average as it sits on the 38.2% retracement of the move from the March highs.

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