The Japanese economy is stealing the limelight in the market arena, as the Yen continues to find some strong volatility in the wake of today’s meetings from the Bank of Japan. One of the key things that will be discussed will be the Japanese economy, with many expecting very little to change in regards to policy, however, expectations around growth are expected to be optimistic after the meeting itself. For many traders this is second nature to the Trump market speculation that has been fuelling volatility so far, but in reality the economy is improving in Japan and this can be seen by Household Spending y/y coming in at -0.3% (-0.6% exp) and Preliminary Industrial Production m/m lifting to 0.5% (0.3% exp). These things will add up and the Japanese economy is improving and will likely look to be a strong contender in 2017 when it comes to trading and Abenomics.

The USDJPY has been one of the most heavily traded pairs and volatility has taken its toll so far with some big swings, but very little trend over the last few weeks. At present it looks likely that we could see the bears take some swings as the USDJPY starts to range down the charts, and as resistance was felt with the touching of the 50 day moving average in recent days. Support at 112.442 has been a major line in the sand, and I would expect to see movements lower touch this key point in the short term, especially with the Yen looking all the more stronger in the wake of positive economic data. Beyond this the next level of support could be found at 111.688 and below this I would expect a solid pause at 110.738 if the market saw further falls.

Further down the pacific and the NZ economy continues to fly the ‘rockstar’ economy status it has been given in recent times, with trade balance data being much better than expected at -41M (-95M exp). This was helped in part by a strong lift in exports to 4.38B compared to the previous quarters 3.86B. In tern the NZD has been bolstered as traders continue to up their bets that the NZDUSD will continue to be a strong performer, and that the Reserve Bank of New Zealand will be forced to lift interest rates further in the future – which will additionally be a boon for NZD bulls who have remained positive.

NZDUSD traders have so far been playing the trend, with very little bearish candles appearing as it climbs the charts. Despite all of this the NZDUSD as lost momentum at resistance at 0.7295, with the few attempts on this level leading to pullbacks in the short term. Obviously the trend is your friend, but if we fail to see momentum traders could look to leave it all together. Any further falls for the NZDUSD are likely to find strong support at 0.7238 and 0.7180 at this stage, with any further drops likely to be picked up by the 20 day moving average.