It's probably a little early to start looking for repatriation moves in the yen but the talk on the town is that it might be bigger than expected
The Japanese financial year end is 31st March and usually in the 2-3 weeks prior we start to hear and see signs of firms moving foreign funds back to yen. Repatriation moves used to be a fairly big deal but it's been a while since we've seen anything really juicy. That might change as desks are starting to raise expectations for those moves
Some traders are noting that better fortunes at Japanese exporters has seen them with some excess dollars to sell and they are layering up offers from 113.00 and 115.00, and some a bit higher to 116.00.
The result of either, or both those actions will limit the upside in USDJPY and puts a potentially bearish bias on USDJPY, and other yen pairs.
Also in focus is Friday's Trump and Abe show. This is starting to snowball into something big as Abe is expected to bring Trump a gift of billions of yen in investment plans. Japanese firms are already making plans for US investing with Sharp just announcing they may partner up with Japanese firms to lead a ¥800bn US investment plan by Taiwan's Foxconn.
If Abe puts on a good show that could give USDJPY a decent tailwind but it will face a battle if these export offers are sizeable. There's also a fair amount of big figure options expiring on Friday (883m 110.00, 1.17bn 111.00, 1.59bn 112.00, 795m 113.00, 1bn 114.00/50, 1.15bn 116.00).
The long and short is that USDJPY faces a lot of upside hurdles over the next few weeks, and has a lot of work to do to make any decent gains. Also, while the Abe/Trump news is likely to be positive, it's probably going to be lacking in any real tradable detail.
Much like my colleague, Mr P, I still see this pair as a rally seller so I'll be looking for shorts if we head into that area of export offers. A quick gander at my charts show me that 113.80 into 114.00 and 115.60 look good for plucking as shorting levels.
USDJPY H4 chart
