Wells Fargo - "Japanese Yen (JPY) Outlook: We expect the yen to weaken over the medium-term. Some near-term corrective strength is possible, given sizeable short positions and extended technicals. Longer-term fundamentals have turned negative for the yen however, including soft growth and aggressive monetary easing, both past and prospective. The government’s expansive fiscal policy also aims to reflate the economy, while ongoing Fed easing could slow the speed of yen declines.
Technicals:
• USD/JPY technicals suggest a probable correction within an overall uptrend.
• TheRSIof67isretreatingfrom‘overbought’levels, while other momentum indicators suggest a possible near-term peak has been reached.
• To the downside, support is possible at JPY86.83 (January low), JPY84.88 (38% retracement target), and JPY81.69 (late November low).
• To the upside, immediate resistance is at JPY89.68 (recent high), JPY90.00 (psychological), and JPY92.81 (June 2010 high)."