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15 Aug 2013
USD/JPY falls to new session lows as Japanese leaders throw curveballs
FXstreet.com (Barcelona) - Yen strength reappears (temporarily?) as a pair of Japanese economic leaders talk down rumors of Abe’s putting forth (insistently) the idea of stimulative corporate tax cuts.
Not everyone on the same page in Japan
“He didn’t tell us anything”, “It wasn’t his idea!”, “We, as a group, will consider options” and “His ideas won’t have any immediate effects” were the three main ideas emanating from Japanese Cabinet members on Wednesday. Chief Cabinet Secretary Yoshihide Suga and Finance Minister Taro Aso each took turns indirectly retracting Prime Minister Shinzo Abe’s recent chatter about using corporate tax cuts to counter any negative effects of the proposed sales tax hikes.
The chatter on Wednesday / Thursday weighed down the USD/JPY (meaning Yen relative strength) after two straight days of sharp gains (meaning Yen weakness). So, it appears the fiscal hawkishness from the cabinet members is boosting the Yen for the time being.
Technical outlook for USD/JPY
Technicians are mixed on the short-term outlook for the USD/JPY. Some are lined up with the logicians and calling for a resumption in the macro uptrend. Others are still calling for a move down to the 92.50 – 92.60 range before resuming the macro uptrend. Short-term resistance comes in at 98.75 (Fibonacci projection) and is followed by the 8/1 close at 99.54. Short-term support comes in at 97.57 and is followed up by 96.00 - both of which are horizontal lines of support.
Not everyone on the same page in Japan
“He didn’t tell us anything”, “It wasn’t his idea!”, “We, as a group, will consider options” and “His ideas won’t have any immediate effects” were the three main ideas emanating from Japanese Cabinet members on Wednesday. Chief Cabinet Secretary Yoshihide Suga and Finance Minister Taro Aso each took turns indirectly retracting Prime Minister Shinzo Abe’s recent chatter about using corporate tax cuts to counter any negative effects of the proposed sales tax hikes.
The chatter on Wednesday / Thursday weighed down the USD/JPY (meaning Yen relative strength) after two straight days of sharp gains (meaning Yen weakness). So, it appears the fiscal hawkishness from the cabinet members is boosting the Yen for the time being.
Technical outlook for USD/JPY
Technicians are mixed on the short-term outlook for the USD/JPY. Some are lined up with the logicians and calling for a resumption in the macro uptrend. Others are still calling for a move down to the 92.50 – 92.60 range before resuming the macro uptrend. Short-term resistance comes in at 98.75 (Fibonacci projection) and is followed by the 8/1 close at 99.54. Short-term support comes in at 97.57 and is followed up by 96.00 - both of which are horizontal lines of support.