News: USD/JPY Zooms Past 100, focus on 105

Sentiment on USD/JPY has turned firmly bullish as the pair surges over 100 for the first time in four years.  Techs and strategists alike are gearing up for a further leg upward in coming days and weeks.  News wires have talk of USD/JPY testing 102 as early as tomorrow.  Clearly from a technical perspective, 100 represented a major barrier, as evidenced by several failures to break above the 99.9 level in past few weeks.  Despite the take breach of this major level of technical resistance, don't look for a wave of short covering.  Per CTFC futures data, speculators were already long at about a five to one ratio.  Corporates continued to hedge their bets, piling up big Yen long positions.  Its unclear whether this is Japanese names "protecting" dollar denominated receivables, but this divergence in trader activity highlights the differing objectives of the participants on the FX market.  Corporates aren't concerned about the money they lose hedging on the futures market, so long as earnings from operations are "protected."  Furthermore, many companies always hedge, regardless of the fundamentals.  Therefore, corporates will stay long JPY for the foreseeable future, out of an unwillingness to take FX, or an inability to the work necessary to take said risk.  The as long as the specs continue to happily sell puts to the corporates, its up, up, and away for USD/JPY.