USD/JPY - Technically the medium-term target of the pair (based off triangle formation off the May 22 high) is for around 108.00

Chris Weston
Chris Weston IG Markets

USD/JPY - Technically the medium-term target of the pair (based off triangle formation off the May 22 high) is for around 108.00. Elliot wave technician would be looking for an initial target on the pair of 104.71 however. It was certainly positive for the pair that we saw a four basis points increase in the US ten-year overnight, however USD/JPY hasn't really reacted too strongly. At 10:50 we the weekly MOF (Ministry of Finance) fund flows and after eight weeks where Japanese domestic funds have been buying foreign bonds, can we see a ninth? Recall one of the key components of 'Abenomics' is to encourage pension funds to buy foreign bonds and thus create JPY outflows. A good number today could see USD/JPY push back to the 103.00 level.

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