The risk appetite that has recently built towards the USD/JPY rubbed off on Tuesday with the pair reaching as low as 83.83 before retracing. At 84.04 this morning the bears seem to have a hard time trying to get the upper hand and with the Bank of Japan having suggested that it is willing to look into a higher inflation target, which should facilitate extensive easing going forward, we see further upside potential in the market. An upside breakout of 84.2 would open the door for 84.55 and 84.7. Key support level for the bulls to watch sits at 83.85, as it has been successfully tested twice. In alternative scenario, the downside penetration of 83.83 would call for a slide towards 83.6 and 83.3 , although this is hard to imagine at this moment in time. Onto the main topics of the day, the spotlight today is to the busy US docket with November’s Personal Income and Spending figures as well as Durable Goods Orders reports due for release.
