THIS MIGHT BE THE ANSWER..
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By: Kathleen Brooks, Research Director Forex.com
There has been some choppy moves in USDJPY today. Post the Japanese earthquake the market sold yen, but it then had a sharp reversal. This is because the earthquake is likely to spur a large-scale repatriation of yen to fund the re-build effort. Japan's large current account surplus gives it room to sell assets and thus bring yen back onshore.
We saw the same action in 1995 when Japan experienced a large earthquake. We saw USDJPY sell off sharply, before coming back later in the year.
USDJPY is now below a cluster of moving averages, and below 82.25 - the bottom of the Ichimoku cloud. This suggests that we could see further declines to 82.00 then the 81.50 lows.
For now, the momentum seems to be in place for further USDJPY declines. On the upside some levels to note include 82.70 - the cloud top and 83.70 - the February highs.
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