The Japanese Yen futures traded as high as .009613 (104.63 USD/JPY) in the early hours of 3/23 session, up 7% ytd.  Global equities were shook yesterday by simultaneous rate hikes in the US and China, S&P 500 futures traded down to 2617.00 overnight -2.2% YTD, while Asian equities, Shanghai Index and Jap Nikkei Index, got hit for -3.4% and -4.5% respectively.  While growth and inflation expectations seem to be souring around the globe, currency traders have sought shelter in the Japanese Yen while the dollar remains subdued and locked in a downtrend despite talk of further increases in US interest rates.  Despite it’s value as a safe-haven currency, set backs are certainly warranted from present levels as we triggered an immediate overbought condition this morning.  Furthermore, Japanese CPI (consumer inflation gauge) came in beneath expectations and runs well below the BOJ 2% target – which should grant the bulls an opportunity to book some gains.  On that note, we will look for further buying opportunities in the June Yen on pull backs to low end of its trading range/trendline support along .009500 as well as an ear to the ground in any major monetary policy shifts by the Bank of Japan. 

Recommendations: Stay bullish on the Yen, seek buying opportunities on pullbacks and be cautious heading into the next Bank of Japan monetary policy meeting.

Japanese Yen Jun ’18 Weekly Chart


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John Caruso

Senior Market Strategist
Follow John on Twitter @JCarusoRJO. John began his career at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. John made his move to the commodity industry at the end of 2005, and began his path at Lind Waldock, at the time the largest retail brokerage division worldwide. John did his undergraduate work at Robert Morris University in Pennsylvania from 1999-2003, where he was a 4 year varsity basketball letterman.  A self-professed “Macro Trader”, John uses a multi-factor fundamental and “quantamental” trading model in distinguishing market cycles based upon the accelerations or decelerations of growth and inflation metrics. His technical and quantitative approach is heavily reliant upon trend and market range analysis via a custom built standard deviation system in helping him make probability-based market decisions. John is an avid reader of all things pertaining to finance, and behavioral economics. Click here to sign-up for John Caruso's Trading Coach Insights. Daily information and insight on all futures marketsin ranging from metals to equities.
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