Post BOJ losses continue to evaporate
The BOJ decision to leave monetary policy unchanged was never as big a surprise as the market reaction indicated.
Given that, and the inability to extend the drop, it's beginning to look like a bit of a blow off. At the same time, the jawboning and threats of intervention from Japanese officials have thinned out parts of the crowded long yen (short USD/JPY) trade.
What's most impressive is that the dollar is moving higher without the help of the Fed or good economic news. Yellen has remained dovish and the dollar has cruised higher despite a weak jobs report.
In short, once the 61.8% retracement at 109.49 breaks, there's not good reason to be short.
