JPY Trading Outlook (02-05-2014)

USD/JPY A 24-pip range in USD/JPY in holiday-thinned trade and with conflicting US econ data du jour. Some lingering weight on Tsy yields and the USD due to the shock miss in GDP and today’s weak Construction Spending that implies GDP should be revised to negative. But ahead of NFP Fri there’s scant appetite for range-removal heroics. Hefty, nearby option expires further smother trading Thur, though the bulk of the expiries Friday are above 103 through 104.50. The 220k ADP and strong Claims sample weak for the NFP report suggest a decent result, even if the GDP downshift has soured the risk mood for now. S&P & N225 futures got back in synch o/n after the latter had lagged badly Wed, but weak Tsy yields since Wed’s NY open have largely offset the lift from the N225’s rebound. A post NFP daily close above the daily Cloud at 102.84 is needed to revive the USD/JPY uptrend. Pattern of higher swing lows since Feb is the downside focus, with the last low at 101.32 & by the up TL from last June’s low. GBP/JPY is threatening to rise out of its ascending triangle on back of firm UK data. Japan Jobs, Household Spending & weekly investment flows on tap tonight.