USDJPY: Technical indicators are supportive, but fragile - BBH

The dollar fell 1.7% against the yen last week as the unwinding of the funding position had greater impact than the elevated US yields, explains Marc Chandler, Global Head of Currency Strategy at BBH.

Key Quotes

“The dollar eased to new five-month lows ahead of the weekend but snapped quickly back as the equity market recovered.  The price action reinforces the importance of support around JPY108.  On the upside, the greenback needs to overcome the 20-day moving average which has helped keep the upticks in check here in February.  It is found now near JPY109.75.  That said, the dollar needs to move above JPY110.50 to bolster the dollar's medium-term technical outlook. While the technical indicators are supportive, they look fragile, though the recovery just before the weekend is surely constructive.  The market did not react much to the Kyodo news report claiming that BOJ Governor Kuroda will be reappointed.”