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USDJPY: Heading for the northwards ascent - BBH

FXStreet (Delhi) – Research Team at BBH, suggests that the dollar has gained against the yen as much as it has gained against the euro as the yen was also weighed down by the negative core August CPI readings.

Key Quotes

“Although many expect the BOJ to expand its unconventional easing by the end of next month, BOJ's Kuroda still seems in no particular hurry. He noted that excluding energy, Japan's CPI is near 1.0%.”

“The dollar has been tracing out a large triangle pattern against the yen since late September. This pattern is usually (75%) a continuation pattern, which, in this case, means a weaker dollar.”

“However, we have suggested that fundamental considerations may favor the one in four chance of this being a reversal pattern. Yesterday, the dollar tested the bottom of the triangle near JPY119.20.”

“With the help of Yellen and the return to deflation in Japan, the dollar went through the top of the triangle today which comes in today near JPY120.65. It briefly poked through JPY121.10, which is the highest since September 10. The high may be in place for the day. The key will be the close for confirmation of the technical break.”

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