The pair is back below ¥120.00 today and is about to test an uptrend that’s been in place since October last year. A rejection of ¥121.00 has triggered a bout of short term weakness and traders will be looking to see if support holds in the ¥119.50 region.
While there isn’t much happening on the JPY side of the equation this week, there is plenty of activity on the USD side. On the calendar today we have retail sales, PPI, the NFIB small business index reading and business inventories data.
Whichever way the data swings, it is likely to have an impact on the greenback. Should the data disappoint, resulting in a close below ¥119.50, then we could be in for some USD/JPY unwinding. The rest of the week is also likely to bring further volatility as we get other key readings, including US GDP. If ¥119.50 is broken, then a move back below ¥119.00 could be on the cards.