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Markets were in a tailspin on Wall Street overnight and the USD/JPY risk barometer of a cliff.  The pair sliced through the 21-DMA & 38.2% of Aug-Oct rise at 112.91/72 and then the Kijun down at 112.46 like butter through a knife. The low was been 112.05 ahead of the Tokyo open.

Markets will now look to Asia’s and the European response to the stock market rout on Wall Street whereby, the political and Chinese  contagion of their ill economy is morphing that air of complacency into sheer fear among investors.  This is being led by Italy and the US bond market causing anxiety in corporate credit, stocks, EMs and currencies which.

Investor  anxiety  is deeply seated

The anxiety  is deeply seated due to inflation and the growth populism along with the debt-financed inflationary activity. Eyes today need to be on the CSI 300, CRB index, USD/CNH and yields. The key US CPI data in the US session that could go either way for the markets depending on the outcome.

USD/JPY levels

To the downside, on a break of 111.80/83, as the  late August high and 55-day moving average and a subsequent follow-through below, the uptrend support lies at 111.55 as a key destination before  111.20 and then deeper levels below the 110 handle at  109.77 as the August low. To the upside, 112.48 as the pivot guards 113.20 R1 and 113.73 R2.