Goldman Sachs Spot Desk View on JPY

GS: JPY – Kuroda stops USDJPY in its tracks, suggesting that the Yens excessive rises have been corrected in the past 3yrs, and that the Yen may not weaken much further on real exchange rate basis. Additional information that the BOJ are not considering excess reserve rate cut added USDJPYs demise, but longer term support levels hold strong some 2 big figures off the intra-day highs. 122.00/50 houses some very strong support – previous double top of the year 122.00/04, lows post break (122.25), overnight lows (122.50), and the 21 DMA that has not been breached since we were sub 120 (122.56). The wind has certainly been taken out of USDJPYs sails and 122 needs to hold into retail sales tomorrow to prevent the longer term accounts from liquidating USDJPY longs.  Cross Yen should continue to trade heavy and fading EURJPY on the approach to 140.00/20 with a 141.10 stop looks attractive all else being equal. Resistance in USDJPY 123.30 ahead of 123.60/80.

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