CURRENCY:JPY : Japanese Yen: At the critical juncture
Chart 1: JPY-USD & USD-JPY's weekly chart as at Dec 12, 2014 (Source: Stockcharts.com)
The long-term uptrend for JPY-USD is still intact provided it does not break below the 0.008 mark (or 1 JPY = 0.008 USD). Alternatively, the long-term downtrend for USD-JPY is still intact provided it does not break above the 125 mark (or 1 USD = 125 JPY).
A breakout of this 40-year trend would have serious ramification, which I am not in the position to examine. However, given the difficulty that the Japanese government is facing in trying to revive the economy, one cannot rule out the possibility that Japanese government may adopt extreme measures, including a cheap yen policy to jump-start the moribund economy. The recent electoral victory for Abe could help to strengthen his hands to push through these measures. Who knows?
Chart 1: JPY-USD & USD-JPY's monthly chart from 1960 to Dec 12, 2014 (Source: fxtop.com)
Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, JPY and/or USD.
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