17 Dec 2014
JPY is soft as risk aversion shifts and exports disappoint – Scotiabank
FXStreet (Barcelona) - JPY trades weak on a shift in risk aversion and disappointing exports and imports, with fluctuations in risk appetite being the largest near term drivers for the USD/JPY pair, notes Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank.
Key Quotes
“JPY is soft today, having retraced half of yesterday’s strength on a shift in risk appetite. Japan’s trade balance was narrower than expected but both exports and imports disappointed, with exports up just 4.9%y/y and imports falling –1.07%y/y. The lower oil price is a net benefit to the economic backdrop, even as it could weigh on inflation on the near-term.”
“However for USDJPY the current fluctuations in risk appetite have proven the largest near-term drivers. Over time we expect USDJPY to be driven higher by the fundamental backdrop; however in the near-term USDJPY is likely still vulnerable to risk aversion induced downside pressures.”
“USDJPY short‐term technicals: mixed—technicals are conflicting, suggesting that USDJPY has not developed a trend. Accordingly, the technical outlook is somewhat clouded.”
“Support lies at the recent low of 115.57; while resistance comes in at yesterday’s open of 117.82 followed by 118.20.”
Key Quotes
“JPY is soft today, having retraced half of yesterday’s strength on a shift in risk appetite. Japan’s trade balance was narrower than expected but both exports and imports disappointed, with exports up just 4.9%y/y and imports falling –1.07%y/y. The lower oil price is a net benefit to the economic backdrop, even as it could weigh on inflation on the near-term.”
“However for USDJPY the current fluctuations in risk appetite have proven the largest near-term drivers. Over time we expect USDJPY to be driven higher by the fundamental backdrop; however in the near-term USDJPY is likely still vulnerable to risk aversion induced downside pressures.”
“USDJPY short‐term technicals: mixed—technicals are conflicting, suggesting that USDJPY has not developed a trend. Accordingly, the technical outlook is somewhat clouded.”
“Support lies at the recent low of 115.57; while resistance comes in at yesterday’s open of 117.82 followed by 118.20.”