• USD/JPY has peaked at 157.77, on Tuesday, suffers a short-term setback to 156.87

• Note the 'yield gap' keeps USD/JPY on an overall upward trajectory

• Yen has been squeezed as hawkish turn grips central banks recently

• Those that are bullish USD/JPY need to see a daily close above the broken 157.53 Fibo

• However, repeated failure to close above the 157.53 Fibo would hint at a "bull trap", a bearish sign

• 157.53 Fibo is a 61.8% retracement of 160.39-152.89 (Sept) drop

• USD/JPY and EUR/JPY tend to move in tandem, log correlations are high above +0.5

Daily Chart


Daily Chart


Correlation Chart

(Martin Miller is a Reuters market analyst. The views expressed are his own)