The USD/JPY fell for a fourth day and reached a low of 84.83

Varengold Bank Research Team from Varengold Wertpapierhandelsbank AG at 11/27/09

Good morning from Germany and welcome to our FX report. The JPY is still dominating over all its major counterparts after further comments by the government and some economic data. Anyways, we wish you a relaxed weekend and happy Thanksgiving.

The JPY gained to record highs against all major currencies before the news came out that the Japanese jobless rate fell to 5.1% from 5.3% after economists expected a rise of 0.1% to 5.4%. The yearly CPI fell 0.3 percent to -2.5% while the household spending on year climbed more than expected last month. The JPY pared most of its advance after Finance Minister Hirohisa Fujii said that he will contact officials in the U.S and Europe about exchange rates if needed. Today, Japan’s financial services minister Shizuka kamei urged for an international response to stop the rise of the JPY. The USD/JPY fell for a fourth day and reached a low of 84.83, the lowest price since 1995. The GBP/JPY reached a low of 139.32, which was the weakest performance since April. Japan’s Nikkei Stock Average fell 1.8 percent, on course for an 8 percent fall this month. The MSCI Asia Pacific of regional shares lost 2.2 percent. The NZD/JPY fell also for a fourth day and reached a low at 59.91 by falling over 3 percent today. The EUR/USD pulled back under the 1.50 level before the announcement of some European economic data today.

Since the beginning of August, the CAD/JPY has been moving along a downward pitchfork. After touching the upper line of the pitchfork, it cam back and reached finally the middle line, which was the lowest price since July 13th. This might be a signal for an oversold market. If the currency pair doesn’t enter the lower part of the pitchfork, it may return towards the upper line of channel.

After falling over 620 pips over the past four days, the EUR/JPY has reached its longterm support level around 127.00. It is the third time that the pair touched this level before gaining back to the upside. Over the past six months, the volatile pair touched also the resistance level around 138.50 three times. If the EUR is strong enough, we could expect a trend reversal.