Yen Stays Firm on Risk Aversion in Asia, But Dollar Holding on to Support
Action Insight Daily Report 9-16-21

Yen Stays Firm on Risk Aversion in Asia, But Dollar Holding on to Support

Yen is trading generally firm today as risk sentiment in Asia is decoupling from that of the US. Nikkei is so far rather resiliently holding above 30k handle, despite slight retreat. But Hong Kong HSI is having another day of heavy selling, breaking to a new low for the year. The fact that Swiss Franc is not following suggests it's more of a problem of Asia. Meanwhile, Aussie is currently the worst performing after poor job data. Kiwi is only getting very mild support from GDP. Dollar and Euro are mixed.

Technically, 109.10 support in USD/JPY remains a major focus, and firm break there will likely resume whole fall from 111.65 through 108.71 support. That could trigger further selloff in Yen crosses elsewhere. For example, CAD/JPY is maintaining near term bearishness after rejection by 55 day EMA. There might be downside re-acceleration ahead to 84.65 support and below, should USD/JPY also take off.

In Asia, at the time of writing, Nikkei is down -0.48%. Hong Kong HSI is down -1.97%. China Shanghai SSE is down -0.68%. Singapore Strait Times is up 0.26%. Japan 10-year JGB yield is up 0.0073 at 0.043. Overnight, DOW rose 0.68%. S&P 500 rose 0.85%. NASDAQ rose 0.82%. 10-year yield rose 0.027 to 1.304.

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USD/JPY Daily Outlook

Daily Pivots: (S1) 109.07; (P) 109.41; (R1) 109.70; More...

Focus remains on 109.10 support in USD/JPY. Firm break there will argue that larger fall from 111.65 is resuming. Deeper decline should then be seen to 108.71 support first, and then 38.2% retracement of 102.58 to 111.65 at 108.18 next. On the upside, break of 110.44 resistance will turn bias back to the upside for 110.79 instead.

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Economic Calendar
GMT Ccy Events Actual Forecast Previous Revised
22:45 NZD GDP Q/Q Q2 2.80% 1.20% 1.60% 1.40%
23:50 JPY Trade Balance (JPY) Aug -0.27T 0.08T 0.05T -0.01T
01:00 AUD Consumer Inflation Expectations Sep 4.40% 3.30%
01:30 AUD Employment Change Aug -146.3K -70.0K 2.2K 3.1K
01:30 AUD Unemployment Rate Aug 4.50% 4.90% 4.60%
01:30 AUD RBA Bulletin Q2
05:45 CHF SECO Economic Forecasts
08:00 EUR Italy Trade Balance (EUR) Jul 6.22B 5.68B
09:00 EUR Eurozone Trade Balance (EUR) Jul 16.8B 12.4B
12:15 CAD Housing Starts Y/Y Aug 270K 272K
12:30 CAD ADP Employment Change Aug 221.3K
12:30 CAD Wholesale Sales M/M Jul -2.00% -0.80%
12:30 USD Retail Sales M/M Aug -0.70% -1.10%
12:30 USD Retail Sales ex Autos M/M Aug -0.10% -0.40%
12:30 USD Initial Jobless Claims (Sep 10) 316K 310K
12:30 USD Philadelphia Fed Manufacturing Sep 18.9 19.4
14:00 USD Business Inventories Jul 0.50% 0.80%
14:30 USD Natural Gas Storage 76B 52B