FXstreet.com (San Francisco) - USD/JPY is now operating at intraday lows around 79.40 after peaking at a 3-day high of 79.63 in earlier trade. The initial buying interest followed reports out of Tokyo that PM Noda may soon call a snap election, possibly this weekend, according to Sean Lee, founder of FXWW, but the reversal comes on safe haven inflows (JPY positive) as investors become more risk averse due to uncertainty surrounding the US ‘fiscal cliff’ and Greece. “Another fall could be expected after consolidation, and the target would be at 78.80 area,” comments Franco Shao
, Chief analyst at ForexCycle.com. “However, the fall from 80.67 is likely consolidation of the longer term uptrend from 77.14 (Sep 13 low), one more rise to 82.00 area is still possible after consolidation.” Worthy of note, a bearish pin was just printed on the 240 minute time frame, supporting the case for further downward price action.
Asian shares are also under pressure as sentiment sours. At the time of writing, Japan’s Nikkei is down 0.4%, while Australia’s ASX and Hong Kong’s shares are both down around 1%.