Having slid to a low since November 1st at 79.80 from a US session high of 80.44, USD/JPY has climbed overnight to where it currently trades at 80.26.
As news of Obama's impending victory flowed in, USD/JPY declined sharply to find support at the November 1st low as markets had factored in an Obama victory as being business as usual for the USD in terms of the ultra dovish Fed policy. However, the momentum lower was short lived as Japanese Finance Minister Jojima commented that he is watching markets for Yen appreciation and disorderly moves as a downside risk to the Japanese economy. He also noted that he would do everything to beat deflation with the Government and the BoJ working together and that a strong Yen does not reflect Japan's weak economic fundamentals. Markets have interpreted this as a sign of further BoJ easing and consequentially seen spot pushed back higher.
Calendar wise, Swiss CPI falls at 08:15 GMT, EU Retail Sales come in at 10:00 GMT. German Industrial Production is scheduled for 11:00, but the headline risk event is the Greek Parliament Austerity Vote which takes place today. Due to the nature of such an event, the timing is ad hoc. ICN.com analysts hold a bullish view on the pair noting that despite there being a downside bias weighing on spot to test areas below 80.00, and Stochastics continuing to show bearish divergence, they still maintain their bullish expectations, looking to buy on dips around 79.50-60.
Elsewhere, European stocks have opened higher, with commodities following suit and critical European yields down and stable.
As news of Obama's impending victory flowed in, USD/JPY declined sharply to find support at the November 1st low as markets had factored in an Obama victory as being business as usual for the USD in terms of the ultra dovish Fed policy. However, the momentum lower was short lived as Japanese Finance Minister Jojima commented that he is watching markets for Yen appreciation and disorderly moves as a downside risk to the Japanese economy. He also noted that he would do everything to beat deflation with the Government and the BoJ working together and that a strong Yen does not reflect Japan's weak economic fundamentals. Markets have interpreted this as a sign of further BoJ easing and consequentially seen spot pushed back higher.
Calendar wise, Swiss CPI falls at 08:15 GMT, EU Retail Sales come in at 10:00 GMT. German Industrial Production is scheduled for 11:00, but the headline risk event is the Greek Parliament Austerity Vote which takes place today. Due to the nature of such an event, the timing is ad hoc. ICN.com analysts hold a bullish view on the pair noting that despite there being a downside bias weighing on spot to test areas below 80.00, and Stochastics continuing to show bearish divergence, they still maintain their bullish expectations, looking to buy on dips around 79.50-60.
Elsewhere, European stocks have opened higher, with commodities following suit and critical European yields down and stable.
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