Why does direction of Yen matter to anybody but currency traders, Forex speculators? Growing number of economist use direction of Japanese Yen as a proxy of general health of world economy. Number of reasons are cited to support this theory, but that is of secondary importance to me. I just trade currencies. Over last couple of weeks I have been asked a lot about Yen. What do you think about it? Are you ready to buy it, yet? And so on. My long term perspective have been short Yen, buying the crosses. Lately, I’ve been waiting for a short term sell off to complete so I could start buying the pairs again. This state of affairs has lasted for about 2 weeks now. JPY has strengthened a little during this time, but not in the manner I anticipated. What was expected, was a sell off, maybe sharp, maybe not, but directional. In reality what happened looks like development of relatively important turning point. This is evident on charts of most Yen crosses. And on a few time frames as well. 
My very long term view has not changed. I still think that the major bull run for JPY is over and markets are building long term bottom. Only that now it appears fairly large pullback is very possible. Move measured in hundreds of pips in most pairs. At any rate, picture is confusing enough for me to have closed the balance of my longer term GBP-JPY holdings.

Couple of days ago I decided to pocket gains of this trade and closed it at 148.85. When in doubt, get out. That’s what I did. In case I’m wrong, new buy order is placed at 151.65, so should the bull run resume I’ll be in on it. This is a contingency plan, however, because the real plan is to buy the beast lower. How much lower? I don’t know yet, market will decide for me.
My long term views do not change very easily, but here other crosses are also showing signs of possible reversal. NZD-JPY, for example.

This a weekly chart and is painting a reversal. Very rare. I don’t expect the price to make a new low, leaving major uptrend intact, but correction can still be substantial. Based on Fibs alone, another 400-500 pips is very possible here. This reversal pattern carries high probability of being the real thing. Not a guarantee, but enough to get my attention.
Other Yen pairs either already lost ground, like EUR-JPY or seem ready to, like AUD-JPY.

This pair may have reacted around previous high, but it didn’t just fall as a result. It started to build a reversal pattern, which indicates a little longer pause. Here is a close up.

Move under 70.00 indicates likelihood of going as low as 67.00. At that time possibility of another swing to 64.00 or lower should be considered, if no bullish reversal is formed. Possible sell signals can also be found on even shorter time frames and other charts.

Even my favorite buy instrument shows a sell scenario on 4H charts. Move under 145.50 and 100 SMA can easily go to 142.00 or lower. Once that happens, daily chart should studied to see what’s next.
That’s why I have not been buying Yen crosses lately, too many signs of reversal. I could ignore one cross or a single time frame but not all of them. In case I’m wrong a buy order in GBP-JPY is already placed (top of the page) and CAD-JPY, explained in No Yuan manipulation.  Kind of hedging my confusion both ways.

Mike K.