USDJPY heading towards a big level
I’ve not much to add to what I wrote yesteday about the 108.50 level but we’re back here again late in the European day. That’s an ominous sign but as we’re off around 90 pips since the data, tackling that level might be a stretch too far.
There’s some in the market linking the move in the yen to Kuroda’s comments on inflation on the Davos panel but that’s a straw clutch at best. Sure he was upbeat about things but that was in the context of the discussion and not a sudden signal that the BOJ will change policy. How fickle would that be not a few days after the latest BOJ meeting where it was firmly announced that it’s business (QQE) as usual. That said, we know how fickle markets can be also.
Long and short, the 108.50 is the number and if it goes, the trade might be to go with it. If it wasn’t so late in the day and week, I’d half fancy testing a tight long from there.
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