NZD/JPY set to keep falling against safe-haven Yen as Kiwi retraces

• The Kiwi is lacking motivation against the Yen in a quiet week.
• Little data for the NZD this week except for CPI figures late Wednesday.

The NZD/JPY is trading along the bottom heading into the Tokyo trading session, sticking close to 78.55 and yesterday's lows.

The Kiwi wasn't able to catch much of a break against the Yen in Tuesday's trading, dropping from the day's high of 78.94 early on and continuing to draft along the bottom through London and New York. The NZD looked to catch a small bump in the early overnight session, but mixed results for Japanese merchandise data sent the Yen up slightly as traders balked at the missed expectations and bought up the safe haven, albeit briefly.

Japanese exports and imports both missed expectations, with exports printing at 2.1 percent (prev. 1.8, exp. 47) and imports coming in at -0.6 percent (prev. 16.6, exp. 5.4). On the positive side, Merchandise Trade Balance figures came in at 797.3 billion (in Yen terms), a clean beat of the expected 498.3 billion and an even further stretch over the previous reading of 2.6 billion.

NZD/JPY Levels to watch

The pair is beginning to show some technical weakness on the H4 charts, and a further breakdown below the current low at 78.45 could see a further drop into the previous swing low at 77.70, while a bullish continuation will see resistance at the current high of 79.60, which would leave the pair open to take a run at February's highs near the 81.00 major level.