Your idea/view/opinion on JPY vs USD

[RahmanSL]

...hmmmm....US Building Permits (MoM) came in better than expected (1.08M vs 1.04M) and the USD/JPY made a half-hearted dash to the 117.67 levels and then retreated almost immediately. This probably has to do with Housing Starts (MoM) coming in a little worst than expected (1.01M vs 1.02M).
My own view is market is really waiting for FOMC minutes, read/interpret whatever they can from that, and take the clue form there.

 

[RahmanSL]

The USD was range bound against most major currencies, but seems to have an axe to grind with Japan as it maintained an uptrend against the Yen.

According to Reuters"
"Japanese exports grew in October at the fastest pace in eight months, an encouraging sign that global demand could help the country recover from recession and support the central bank’s optimistic economic outlook.
The 9.6 percent annual rise in exports in October was more than double the 4.5 percent gain expected by economists in a Reuters poll and faster than September’s 6.9 percent year-on-year increase.
In another sign that the world’s third-largest economy is regaining its footing, a private flash survey showed that factory output grew in November at the fastest pace since March....Reuters"


USD/JPY has very briefly touched resistance level 118.97level during late Asian session and so it remains to be seen whether it will go to the 120 levels.
And if it does go to the 120 level, I think perhaps the BOJ will have to throw everything into it (except Abe) to intervene.

 

[RahmanSL]

Most analyst seems to agree that no matter what happen this Sunday on Japan snap election results, the Yen will eventually be bound for 125 levels late 2015, driven by diverging monetary policy with the U.S. and increased capital outflows.

With expected & projected win for Abe's Liberal Democratic Party and probability keeping its two-thirds majority in the lower house and allowing it to override upper-house decisions, that will probably accelerate Yen depreciation.

However, Central-bank policy, not politics, will be the primary driver of the yen. And the BOJ is expected to expand stimulus again next year while the Federal Reserve boosts the appeal of the dollar by lifting U.S. interest rates for the first time since 2006. That will keep the scenario for a weaker yen intact.

Reading the above scenario & prediction, wouldn't that make sense to go "long" on the USD/JPY before the snap election results??
Your thoughts & views will be most welcome.

**Note: As a matter of interest, I have already started going "Long" from the 118.05 levels...TP1 at 121 and TP2 at 122
And as a matter of course, I will also take some more "Longs" below the 118 levels

 

[RahmanSL]

..hmmm....some reputable FPA analysts predict the Yen will rise against the USD after snap election results on Sunday....with one even saying technical analysis on past performances see USD/JPY at 114 level.

Well, I still maintain my post#23 views that the USD/JPY will go to 121 and 122 levels regardless of snap election results due to Abenomics policies since he is widely expected to win the election.

 

[RahmanSL]

Abe won as expected....excellent political strategy too in calling for a snap election when opposition parties are in disarray to the point that even if they (opposition) somehow managed to win all the seats they managed to get candidates to contest in, they will still loss to Abe LDP.

Almost all Analysts/Commentators from Bloomberg & CNBC/articles/etc agreed that the USD/JPY is doomed to go to the 120 levels eventually.
So, in light of that, I will still be taking on some "Longs" at the 188.0 and below levels for the ride up........and will also scalp trade both directions based on M1 & M5 charts.

 

[RahmanSL]

Looks like there are conflicting opinions on whether the FED will adopt a "dovish" or "hawkish" tone in their speech....and that, of course, will have significant effect on currencies market.

Frankly I am more for a mildly dovish sentiment so as not to upset the market too much due to the numerous financial and economic challenges facing so many countries.
For the US to be too dovish or hawkish at this point in time have the potential to set off a series of chain reaction which will very possibly destabilize world economies.

It will be wise to be a bystander for now and wait how market will react to Federal Reserve’s Federal Open Market Committee meeting (FOCA).

 

[RahmanSL]

As reported by FXStreet - Fri, Dec 19 2014, 03:46 GMT

USD/JPY is idle and awaits the further impetus to move one way or the other having found an equilibrium between these familiar ranges. However we have a number of risk events ahead yet starting with the statement post BoJ and then the following press conference by Governor Kuroda while we will be listening out for any mention of the value of the Yen and oil prices.

Then, next week we have a number of US data releases, albeit over very thin volumes of business as we get set to the holidays. Technically, these intraday rallies that have gone on are proving to remain capped by resistance at 119.20 in the main as Karen Jones, chief analyst at Commerzbank. “Please note our preferred scenario is for a slide back to 113.85/84 but we look for stabilisation ahead of 111.25”.

 

[Bilal Jafar]

At this point of time USD/JPY trade is a bit of a risk because with number of events to come next week and more specifically big event of Bank of Japan coming with the press conference of President of BOJ, at the moment traders need to hold their positions and then wait for the events to conclude, although it will provide opportunities in near future but trades would be too risky to place at this point of time.

 

[RahmanSL]

Yes, it would be wise to wait and see what further developments from both sides of the ocean.

On the personal side, I think Abe much prefer a weak Yen for increase exports, less imports, and build up more positive trade deficits.....more exports means more jobs and greater consumers spending, which in turn will boost local economies..... oil & gas at these low levels works out to Abe advantage even with weaker Yen.

So, personally, I think USD/JPY will probably visit the upper highs before going down to the 112-111 levels.

 

[RahmanSL]

Most relevant report & rational I have read is by FXStreet:

Quote:
Cheap oil is good for the economies of the US, Europe and Japan and the recent plunge in prices should support the USD, but for the EUR and JPY the dynamics are more nuanced.............
......Nonetheless, for central banks fixated with fears of deflation – the Bank of Japan and European Central Bank – it represents another reason to pursue very expansive monetary policies and even increase them. So in the short to medium term, falling oil prices could be a negative for EUR and JPY. Under normal circumstances lower energy prices would be bullish for both currencies..............
.......The one big caveat to a rising USD is that if it did trigger a crisis in emerging markets, particularly with countries which borrowed in USD, it could spur central bank action to stem its rise. That's not on the cards at the moment as Japan, the Eurozone and many others would love a stronger USD so they can more easily export to the more vibrant US in a bid to rediscover growth at home.