USD/JPY lifted on deteriorating sentiment for Japan – Scotia

By FXStreet FXStreet (Guatemala) – Eric Theoret, CFA, CMT FX Strategist explained that USD/JPY was softening modestly into the NA session with a near-term response to the S&P ratings downgrade (A+ from AA-, outlook stable from negative), a result of the rating agency’s flagging confidence in the ‘government’s strategy to revive economic growth and end deflation’.

Key Quotes:

“The deterioration in sentiment will prove an additional weight for JPY, adding to existing pressure from relative policy considerations in light of Fed-BoJ divergence. The broader tone remains an important risk for JPY, given the potential for short-lived, haven-driven gains and vice versa.

USDJPY technicals are conflicted and close to neutral. Recent closing support has been observed at the 21 day MA (120.11), with closing resistance at the 200 day MA (120.83).”
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Source:: FX Street