JPY: USD/JPY See Strong Reversal Now Testing 143.00

USD/JPY entirely reversed Tuesday's moves to close the session down 0.26% at 143.23. The moves were largely linked to risk on moves in equities with the USD falling on the back of this while lower front-end US yields (aided by weaker-than-expected US consumer confidence) in the US have helped tilt the USD index back into its weakening trend.

• The initial weakness in the yen was driving by BoJ Gov Ueda where he indicated that the central bank will carefully assess economic and market conditions before raising interest rates again, with no urgency for a hike in the near future. Ueda's comments, following criticism of the bank's communications, suggest that a rate increase is unlikely at the October meeting, and many economists expect the next move in December or January. Ueda also highlighted the yen’s recent strength as a factor easing inflationary pressures.
• The Yen trades about 2.5% lower than the Sept 16 highs when it hit 139.56, although it may have found some support at the 145.00 area, as we remain in a downward trend below this level.
• Looking at the technicals the USDJPY traded higher last week and remains above its most recent low. However, short-term gains appear corrective. Trend signals remain bearish and the pair traded to a fresh cycle low last week. The recent breach of key support at 141.70, the Aug 5 low, confirms a resumption of the downtrend. Sights are on 139.00 next, a Fibonacci projection. While to the upside the 20-day EMA has been breached with the next key resistance is 146.57, the 50-day EMA.        
• Today with have PPI Services & Store Sales which are both not expected to move markets.