Yen’s Weakened Trend Extends

The Yen has continued to weaken as the U.S Dollar is bought against the Japanese currency. The 114.00 level is now being tested. The Nikkei Index has continued to power higher and the victory by Prime Minister Abe’s government has factored into trading also.

Combination of Factors Causing Yen Selloff

The Yen has continued to get weaker against the U.S Dollar in early trading today. The Japanese currency is near the important 114.00 level against the U.S Dollar.

The combination of Prime Minister Abe’s electoral win on Sunday and the steady buying trend on the Nikkei Index have continued to help the Yen lose value.

Central Banks and Inflation Need Monitoring

If the U.S Dollar continues to strengthen against the Yen, the Japanese currency’s next large resistance may rest around the 115.00 juncture.

Inflation data will come from Japan early on Thursday and on Friday which could factor into existing sentiment. The ramifications from global central bank events which are on the immediate calendar should not be discounted either.

Yen’s Long-Term Perspective

The Yen weakness should also be viewed via a long-term perspective.

The Japanese currency is near important resistance and speculators may be willing to position themselves for the potential of further Yen deterioration.

For traders worried about a reversal in the Yen, support looks to be around the 113.05 level.

In the short term, we believe Yen may be negative. Mid-term and Long-term we are unbiased

Yaron Mazor is a senior analyst at SuperTraderTV.

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