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Forex pairs in this Article » USD/JPY
FXStreet (Barcelona) - The long-held conviction by the specs community of buying Yen strength appears to be teetering, as resumption of the sharp bearish moves in USD/JPY seen last week takes market participants by surprise, and forces real money out of stocks and into bonds.

It is important to note that since the Fed appears to have succeeded at convincing the market over a gradual wind down of bond purchases ($20 bn tapered so far...), the prospects of a global economic recovery with an absence of US artificial stimulus has sparkled a real sense of risk-aversion, leading to the collapse of confidence towards EM markets. But the main take away over the greater volatility we are seeing is the fact that a shockingly downbeat US PMI, 51.3 vs 56.00, is no longer perceived as positive for US stocks, but instead it causes a negative up-roar, suggesting the market mentality is at an inflection point, with real money leaving the stocks and entering the supposed safety of US bonds - the 10-yr yield curve depressed below 2.6% -.

The ichimoku readings do not offer a supporting picture for USD/JPY, Ivan Delgado, Head of Asian Editors at FXStreet notes: "USD/JPY ichimoku indicators are telegraphing a dire picture for the interest of buyers short term, as real money and leveraged accounts exit the market in what is still an ongoing clean-out of longs for a potential re-set of the rally at lower levels. The bearish breakouts in both the Nikkei 225 and SP500 indexes are an important inflection point not to be overlooked, which should allow for further conviction to buy yen on weakness. It is also important to notice that based on seasonal patterns, the Yen tends to strengthen in February, adding to the case of sustained USD/JPY counter bull trend moves."
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