FXstreet.com (Barcelona) - The Yen has continued weakening against the Dollar on Monday, although not really affected by forecasts of the largest Japanese GDP contraction since 1974, at the moment JPY is attempting to break 92.00 level.
USD/JPY is trying to enter the area between 91.80 and 92.15 as the first step towards Jan 6 high at 94.64. According to Kasper Kierkegaard, technical analyst at Danske Bank, the approval of the U.S. stimulus plan has inspired some risk appetite that can work in favour of the USD: Following a run-up in USD/JPY towards 92 by 10 February, on improved risk sentiment ahead of the presentation of the US financial rescue plan, speculative investors reduced net long JPY positions slightly.
Nicole Elliott, senior technical analyst at Mizuho Corporate Bank shares the opinion of the USD trading above 94 Yen in the medium term : We continue to allow for a lot of messy broadly sideways work, with an initial squeeze towards 94.00 later this month. Note that a brief squeeze to 98.00 some time in H1 2009 cannot be ruled out. While this takes place the tendency will be for the Yen to loose ground against a host of other major currencies, taking Yen crosses higher, probably to the surprise of many who are still calling for de-leveraging to cause a stronger Yen.