Nikkei consolidating above 14,000

Japan has been a silent achiever this week and has quietly led the region.

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.

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