Talking Points:

• The yen crosses are richly priced, and it takes careful fundamental support to keep these pairs

• A struggle for USDJPY and other yen pairs already shows the market's hope for BoJ support is waning

• Risk aversion - as with many things - would be the most effective catalyst, but it isn't necessary Expect breakouts?

Use the DailyFX Breakout 2 strategy to signal or confirm setups

A long yen cross position was one of the most lucrative and 'no-brainer' trades of 2013. Yet, that momentum has stalled, and the risk of its collapse continues to build. The certainty and drive behind USDJPY and the other yen-based pairs through their rally phase was derived from the global market's audacious reach for yield and the implicit vow by the BoJ to keep their currency moving lower. Over the months, though, speculative sentiment has tempered and the central bank has backed away from vows of another massive stimulus upgrade. The yen crosses are looking increasingly expensive as the important fundamental floor crumbles. We discuss the fundamentals, technicals, timing and cues for trading this overarching yen view in the weekend Strategy Video.

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