When the year started and stocks raced lower, the JPY pairs slid lower as the flow of funds moved out of the risk currency pairs. Putting it another way, the flow of funds went into the relatively safety of the JPY. Today we are seeing the stock market rise but we are not seeing the accompanied rally in the JPY pairs. In fact with the exception of the CADJPY, all are lower on the day. In the charts below, the dash line represents the closing level from yesterday. All the pairs are
JPY pairs are showing weakness in trading today event though equities are higher on the day.
Lower oil prices – although not helping inflation get to 2% – should be a boost to the oil import hungry nation and also a benefit to the consumer. Japan is the third largest global net oil importer. This will help the trade numbers which have been in deficit since the 2011 Fukushima earthquake and nuclear disaster. The full impact of the decline in the oil prices has not been reflected in trade numbers for Japan (the November number is the most recent), but the trend toward lower oil imports should continue.to improve which may in turn benefit the JPY in the process.
Japan Trade Balance.
Technically, the GBPJPY is moving below the 100 day MA and the 50% of the move up from the October 2014 low at the 179.27 and 178.84 levels respectively.
GBPJPY falling below the 100 day MA today.
The EURJPY is even more bearish with that pair running away from the 200 hour MA in trading today (see chart below- green line). It is also falling and moving away from the 61.8% of the move up from the October low.
EURJPY falls below the 200 day MA
The NZDJPY is more supported compared to the EUR and the GBP. This reflects the higher interest rates in NZD and stronger economy. Nevertheless, it too is being hit over the last few days of trading.
The NZDJPY is coming under some pressure as well.
