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15 Dec 2014
USD/JPY: Tight opening range (so far) on Abe victory
FXStreet (Guatemala) - USD/JPY is trading at 118.61, down -0.06% on the day, having posted a daily high at 118.71 and low at 118.44
USD/JPY has been steady in early Asia awaiting other nations to remerge and back to trading desks to digest the Abe victory that will potentially create demand for USD/JPY and put Yen into supply across the crosses over the course of the week. However, with the recent violent swings in the Yen, it is hard to gauge how much of a victory for Abe’s Liberal Democratic Party was already priced into the Yen.
However, this victory should be positive for the USD/JPY, due to Abe’s Abenomics as he retains a further four more years in power, enabling him to complete his vision of economic reform, which would underpin a weaker due to the monetary policy and essentially printing vast amounts of money.
However, we are now entering holiday season markets and swings in the Yen and dollar may be volatile in thinner markets. There are two sides to the story as we now await the FOMC. To the downside, as analysts at BBH noted, the JPY117.00 area corresponds with a retracement objective. “The dollar's rally was so sharp that should the JPY117.00 level go, there is not much support until closer to JPY115.50. The JPY120.00-20 offers important resistance”.
USD/JPY has been steady in early Asia awaiting other nations to remerge and back to trading desks to digest the Abe victory that will potentially create demand for USD/JPY and put Yen into supply across the crosses over the course of the week. However, with the recent violent swings in the Yen, it is hard to gauge how much of a victory for Abe’s Liberal Democratic Party was already priced into the Yen.
However, this victory should be positive for the USD/JPY, due to Abe’s Abenomics as he retains a further four more years in power, enabling him to complete his vision of economic reform, which would underpin a weaker due to the monetary policy and essentially printing vast amounts of money.
However, we are now entering holiday season markets and swings in the Yen and dollar may be volatile in thinner markets. There are two sides to the story as we now await the FOMC. To the downside, as analysts at BBH noted, the JPY117.00 area corresponds with a retracement objective. “The dollar's rally was so sharp that should the JPY117.00 level go, there is not much support until closer to JPY115.50. The JPY120.00-20 offers important resistance”.