Dollar Yen ended 2021 by closing above the Oct 2018 monthly high of 114.55 and confirming a break of the monthly trend to the upside. While the 114.55 level had been breached the prior two months, Friday’s close at 115.10 was the technical confirmation required to flip the trend positive.

While the dissenters may feel that a 14% price appreciation from the March 2020 lows of 101.20 would be obvious at this juncture and unwilling to agree, there is no arguing with the price action. As we pointed out last week, Dollar Yen held it technical support area above 113.55 and refused to close below. This is a positive sign, yet it is only one part of the Yen weakness story.
Looking a bit deeper, we have to go back to the 2020 lows where volatility helped to expose where the real money accounts were positioned. Once we look at the price action from the lows during 2020 and compare the Dollar’s move vs the Yen, that 14% gain we mention above is paltry in comparison to it’s other major trading partners.
When comparing the moves from those 2020 lows to the current highs, we can see that all major cross pairs vs the Yen have appreciated more than vs the USD.
Dollar 14%
Euro 17%
Swiss 16%
Sterling 27%
Canada 26%
Aussie 44%
Kiwi 38%
Based on the technical confirmation of the break higher, we see continued price action higher towards an initial long term target of 127.30.