This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
The Japanese index is now looking to consolidate its gains above 14,000. The Nikkei printed a high of 14,350 this morning, but has since turned negative.USD/JPY rallied through 100 and is now trading at around 100.64 and is in a strong near-term uptrend. The next level of resistance is at 101 and with plenty of US event risk on the way, we feel there is potential for further volatility.
Later today we have the US trade balance, unemployment claims and the ISM non-manufacturing PMI to look out for. We are hoping to see some strong readings from these releases to spur further USD strength.
This would then push USD/JPY higher and in turn support Japanese equities. BoJ Gov Kuroda speaks tomorrow and we could hear some interesting comments, particularly as we approach the upper house elections. Our potential stop on the trade is now at 13,480 and we will update stops and targets as volatility ramps up towards the end of the week.