USD/JPY skyrockets on tax cut speculation
TOKYO (Sept 26) The USD/JPY is soaring due to great Nikkei uptrend move, as well as due to the session highlight chattering on “tax speculation issue”.
USD/JPY is alongside with Nikkei the best movers; up 0.59% and 1.22%, respectively
The USD/JPY broke a bit earlier the 99.00 resistance, enjoying the biggest currency move across the board since the early trading opening of the Asian session. The main uptrend drivers for the pair are by far, the great upside Nikkei move (+1.22%) and to a major extent, the tax cut speculation chattering across the globe. Earlier, news wires said that "Japanese government will study a corporate tax cut and advise public pension funds to raise allocations of risk assets". It seems now that corporate taxes will probably soften the schedule sales tax on the first of April, i.e. the “Abenomics” fourth arrow to boost foreign investments in Japan as soon as possible. Needless to say, the Nikkei breaking of the 14.500 barrier, was a very important factor in the Japanese currency surging.
Technical Outlook and Strategic Bias on the USD/JPY
Karen Jones, Head Technical Analyst at Commerzbank suggests that “the USD/JPY has eased slightly lower before recovering this morning, but essentially is sidelined in a converging range. Furthermore, she mentions that our initial upside target is the 100.62 September high then 101.54/60 July high and the Fibonacci retracement, with a long term Fibonacci retracement offering a 105.48 resistance point above here.”