I’m, generally speaking, a bear when it comes to USD/JPY. I’ve made a fair bit of money over the last few years selling this pair and it’s pretty hard to get over this bias. Historically speaking, we are at quite low levels so I don’t want to get carried away selling at the base but on the other hand, I still see no absolute proof of a base forming. True the BoJ seems likely to be more aggressive in its intervention but if a market is headed lower no amount of intervention will hold it up.
The immediate future for USD/JPY depends on the crosses. Will EUR/JPY break above 128.00 and will AUD/JPY break above 88.00. If both do, then USD/JPY will at least hold steady if not rise significantly. If the crosses fail to break higher then USD/JPY will probably stay steady if not fall. If the crosses start to fall again, but AUD/USD and EUR/USD hold their bid tone, then the USD/JPY obviously will be collapsing. Not a scenario which many people are considering but with China set to reval sooner rather than later, it is a scenario we should at least be mindful of.
