FXstreet.com (London) - Nikkei gapped open nearly 80 points today taking cue from positive US markets. Investor confidence has been lifted with positive data streams recently, and business activity appears to be picking up. The Tokyo stock market has since traded at three month highs, testing resistance at 10500 points.
Japanese Yen has considerable effects on the Nikkei due to its impact on exports. USD/JPY is currently trading at 91.70 against the Dollar, up 6 points from the open. Trading at near 2 month highs as we write, Yen weakness will comes at a good time, with BoJ facing real threats of deflation, and a strong currency damaging Japanese exports.
For key technical levels Valeria Bednarik, collaborator at FXstreet.com, guides us: As expected, pair hold around the 91.30 area, and is back near to weekly highs, still generally bullish yet with a notorious lack of strength do to thin volumes. Ahead of BOJ meeting and after a Japan Holiday, Japanese yen crosses could surprise market players during current session, thus Yen bias remains to the downside. Acceleration above 91.85 should send the pair to test the 92.40 level.