I think the Japanese yen is still going to be very soft going forward.
The yen is a popular asset during turbulent times.
The Bank of Japan had recently intervened in the market, but that had more to do with the rate of change than anything else. Quite frankly, they use 15% of their foreign exchange reserves to make that move, and we are almost already back to where it started from. In other words, people do not believe that the Bank of Japan is going to do everything it can to keep the exchange rate down. However, if we get another extraordinarily parabolic move, then we could have the Bank of Japan enter again. Because of this, I think this is a situation where you continue to look for dips as buying opportunities going forward.
The ?142.50 level should be supported, as it has seen a lot of interest on shorter charts. Underneath there, the ?140 level comes into the picture and I think that is an area where things get really interesting as the 50-Day EMA has just crossed above there and a lot of people use that indicator as a dynamic floor. The market continues to squeeze higher, and the fact that we are closing the Friday session toward the very top of the range tells me that we will probably a follow through. As long as it’s orderly, it’s very likely that the Bank of Japan will not interfere because quite frankly there’s no point in fighting the force of nature that is momentum. As long as they continue to suppress rates and the Federal Reserve continues to tighten, the idea of the market moving higher makes the most sense of anything else. I think the Japanese yen is still going to be very soft going forward.