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USD/JPY: Nasty turnaround, 115.40/40 eyed

FXStreet (Bali) - USD/JPY's nasty reversal off 117.00 continues, with the massive liquidation of Yen shorts leading to a new session low at 115.60 as Nikkei also continues in free-fall, currently down more than 2%.

The publication of a much lower-than-expected Japanese GDP for Q3 , initially saw a negative reaction in the Yen on sales tax delay play, however, since the Yen market acted stubbornly bearish during the most part of last week pricing-in a delay in sales tax, we are seeing a typical 'buy the rumour, sell the fact' reaction in Japanese markets, aiming to catch as many traders having misread the play as possible in the wrong foot, with 115.40/50 now approached.

Jim Langlands, Founder at FXCharts, notes: "Support will now arrive at 115.65, a break of which would allow for a run to the 200 HMA at 115.10 and the daily Tenkan at 115.00. Under here looks unlikely in the near term, but as I said, the daily indicators are overbought and look to be preparing to roll over so, if long, some caution is warranted."

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