2 Dec 2014
USD/JPY working its way to absorb 118.50 offers
FXStreet (Bali) - USD/JPY has had a quiet session, with the gradual rise off 117.85 low facing a wall of offers unable to be penetrated at 118.50, with the Nikkei 225 up by a modest 0.10%.
Traders are still digesting the decision taken by Moody’s to cut Japan's sovereign rating to A1 from Aa3, citing “heightened uncertainty” over the ability to re-address its fiscal deficit following a delay in a planned sales tax hike.
According to Youjiro Goto, FX Strategist at Nomura: "The downgrade looks negative for JPY as a first glance, but the possible effects on the portfolio shift and political debate could be slightly JPY positive in the near term. As the divergence in monetary policies between the US and Japan remains large, the portfolio shift is still likely to continue and the election result may not be significantly affected. Thus, we do not judge the announcement today to change the mid-term JPY weakness trend."
Jim Langlands, Founder at FXCharts, shared his take on the Yen technicals, noting that "we may be in for some more choppy trade, which could well last until Friday’s NFP figure but the medium term plan of buying dips remains the play. 118.00 will be the initial support ahead of the session low at 117.85. On the topside, above 119.15 high look for a run towards 120.00."
Traders are still digesting the decision taken by Moody’s to cut Japan's sovereign rating to A1 from Aa3, citing “heightened uncertainty” over the ability to re-address its fiscal deficit following a delay in a planned sales tax hike.
According to Youjiro Goto, FX Strategist at Nomura: "The downgrade looks negative for JPY as a first glance, but the possible effects on the portfolio shift and political debate could be slightly JPY positive in the near term. As the divergence in monetary policies between the US and Japan remains large, the portfolio shift is still likely to continue and the election result may not be significantly affected. Thus, we do not judge the announcement today to change the mid-term JPY weakness trend."
Jim Langlands, Founder at FXCharts, shared his take on the Yen technicals, noting that "we may be in for some more choppy trade, which could well last until Friday’s NFP figure but the medium term plan of buying dips remains the play. 118.00 will be the initial support ahead of the session low at 117.85. On the topside, above 119.15 high look for a run towards 120.00."