Japan

The Nikkei has been grinding higher in recent weeks, but with momentum turning lower at resistance and asset managers are increasing longs, perhaps it's ready for a leg or two lower.

Another day, another milestone for USD/JPY which closed above 152 for the first time in nearly 34 years on Thursday.

Japan's core CPI didn't fall below the BOJ's 2% target, although it did match it. Which has seen AUD/JPY and USD/JPY retrace further from their highs in light of yen strength.

A bearish reversal pattern has formed on USD/CNH which implies a move down to 7.10. And if the yuan continues to strengthen, it could see the yen follow and scupper USD/JPY attempt at breaking 152.

Yen weakness has come rushing back in early-2024 trade, but U.S. and U.K. CPI could provide a jolt to FX trends in USD and GBP, which could produce some change in both USD/JPY and GBP/JPY.

USD/JPY traders barely acknowledged the release of Japan’s October inflation report, reinforcing the view the only thing that matters for the pair right now is developments in the US economy, unless the Bank of Japan (BOJ) signals or starts to normalise monetary policy.

AirTrunk is one of the largest hyperscale data centre developers in Asia-Pacific. Based in Australia, the company is exploring a listing on the ASX that could value them at AU$10 billion.

As activity in other advanced economies starts to splutter, Japan is firing up.

Slower trade is a growing theme across Asia, with Japan’s export data showing signs of slower demand across Asia/ Meanwhile, USD/JPY has approached key resistance.

A surprisingly strong GDP report for Japan saw the Nikkei 225, rise to its highest level in 20-months and tap 30k.

USD/JPY remains in an uptrend after testing rising trend line support and the 50-day EMA midway through last week.

BOJ governor Ueda said that the central bank could cancel YCC and shrink their balance sheet, if their price targets are met in a 'sustainable, stable manner'.

The Japanese yen has surged higher during today’s Asian session, suggesting the end of fiscal year repatriation trade is in play.

So the BOJ have indeed been discussing potential tweaks to one of their major policies, although that is not to say any of it will happen soon (if at all) before being scrapped

There have been high hopes that Ueda will bring a hawkish twist to the BOJ, but early remarks in his confirmation speech say anything but.

Shorting USD/JPY is not a new idea, and as the pair has erased around half of its 21-month rally, we see the potential for a bounce over the coming weeks.

Given the confluence of resistance levels and general low-interest trading environment ahead of year-end, it would be logical for the USD/JPY’s corrective rally to reverse ahead of the weekend...