USDJPY is still finding its way up, despite the risk aversion sentiment which could contain the US session on receding hopes for avoiding the fiscal cliff with no cheering headline until now to come out from Washington.
The markets have gone forward buying the greenback even in front of the Japanese yen which usually finds demand in the risk aversion waves but this time, the recent affirmation of the new Japanese cabinet of pursuing 2% yearly inflation target was enough to put the Japanese yen under pressure versus the greenback too ahead of the release of the Japanese inflation data which came to increase the Japanese yen loses pushing USDJPY above 86.5 with Nov Japan CPI placing below zero for the sixth month in row at -0.2% showing that there can be more efforts to come by the new government and BOJ which has injected last week another 10 trillions yen into its assets purchasing plan to worth 101 trillions currently.
From another side, Nikkei 225 could have a green opening thanks to the pressure on yen which supports the exporters’ operational profits and stocks value as well despite the current increasing worries about the falling of the US economy in the fiscal cliff.
Anyway now, USDJPY can be well-supported further in the case of having a deal in US can cause avoiding of the cliff and tending back to risky positions but in the same time the exposure to the profit taken wave is hard to be avoidable in the case of falling in it with no deal and God willing, it can face now in its ascending resisting levels at 88.1 , 89.14 . 90 psychological level, 92.87 and 94.97 which has been its formed top on the 4th of may 2010, after it could have resume its creeping up above 85 psychological level this week even with no filling of the gap which started the week on but easing back from here can be met by supporting levels at 85.46, 85, 83.85, 83.23, 82.1, 81.68, 80.87, 80 psychological level, 79.06, 77.93 and 77.10 whereas it’s formed its bottom on 13th September this year to these current levels on the BOJ last stimulating efforts in last September.
FX Market Strategist
Walid Salah El Din
Mob: +20 12 2465 9143