With USD/JPY’s break of important 88.00 support today the focus turns to trend lows at 87.11, an area we have visited three times over the the last year, We’ve not been down there since January 21.
Offers will be large on rebounds to 88.00, we suspect, with Japanese exporters who’ve been praying for firmer levels happy to get any rally to sell into.
We should find out in the next few days just how hands-off the new Japanese government is on forex policy. Many fear USD/JPY could tumble toward 1995 levels (just below 80.00) if momentum accelerates. A break of 87.11 would be the accelerator, for sure.
USD/JPY trades now at 87.55.
