The Yen has weakened slightly and may continue to be negative as full trading volume returns and the markets are likely to remain speculative the next two days.
Nikkei Index Soars Higher
After being closed early this week for holidays, investors have returned to work in Japan with a flair. The Nikkei Index has roared higher and added more than 3 percent of gains today.
The Yen has weakened slightly this morning against the U.S Dollar and is near 112.60, and may be ready to test resistance in the short term.
Weaker Yen Correlation
While on holiday the Yen did find itself getting stronger, as did other major currencies against the U.S Dollar. However, the strong buying of Japanese equities typically correlates into a slightly weaker Japanese currency.
If investors buy the U.S Dollar against the Yen, resistance levels of 113.00 could be revisited again – which would fall into line with its mid-term range.
Full Trading Volumes Resuming in Japan
The Yen has produced a fairly steady cycle for traders. Its range between 111.50 and 113.50 has been relatively consistent since September.
As full trading volumes resume in Japan, we expect plenty of market action to remain going into the weekend for both the Nikkei and Yen.
In the short term, we believe Yen may be negative. In the mid-term and long-term we are unbiased.
Yaron Mazor is a senior analyst at SuperTraderTV.
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