The greenback is testing weak support at ¥76.50. The BOJ is unlikely to succeed in preventing further appreciation of the yen, to a medium-term target of ¥73.00.
* Target calculation: 76.50 – ( 80.00 – 76.50 ) = 73.00
Strong bounce in Korea, Taiwan
What appears to be strong institutional buying caused a strong bounce across a slew of Asia-Pacific markets. Long tails and a sharp spike in volume indicate buying support and a rally to test resistance (at 410 on $KRDOW).
The Dow Jones Taiwan Index shows an even stronger open-close reversal signal accompanied by big volume.
This is stronger than shorts taking profits or a few hooray Henrys snapping up bargains. The large volumes are indicative of institutions with deep pockets. Expect a decent rally, but it is likely to eventually fail. Not even Asian tigers are immune from a dead cat bounce — and bear markets take months to resolve, not just a few days.
Japan Korea
The Nikkei 225 followed through below 9400 Monday, closing at 9100. Target for the breakout is 8600*.
* Target calculation: 9400 – ( 10200 – 9400 ) = 8600
The South Korean market is one of the few to show some resilience, with the KOSPI falling more than 7 percent to 1806 before recovering about half of its losses to close at 1876.