Yen Proves Capable of Sustaining Gains
The Yen has proven capable of sustaining strong gains against the U.S Dollar. The Japanese currency is near 110.80 after having broken important support levels last week.
A look at a short term and a mid-term chart of the Yen is probably enough to make short term traders suspicious about the Yen’s strength continuing to prosper.
Deflationary Crisis Coming to an End in Japan
However, recent economic data from Japan has highlighted an improving statistical landscape for the nation. And the Bank of Japan has been quoted as saying, it believes the deflationary crisis which has plagued the country may be approaching its end.
The Nikkei equity index has certainly achieved solid gains the past six months, and interestingly the Yen has started to show divergence with the Nikkei Index.
Long Term Chart Provides Tempting Ratio
The past few years have seen the Yen weaken if the Nikkei has grown stronger, but the past couple of months have begun to produce a different trend line.
Interestingly a long term chart of the Yen may provide the impetus for traders to remain sellers of the U.S Dollar against the Yen. Critical support ratios were tested this past September and the Japanese currency may again try to test the 109.00 price levels.
In the short term, we believe the Yen may be positive. In the mid-term and long term we are unbiased.