Futures are off about 0.5% this morning as the economic data was somewhat better than expected.

It’s an important juncture for the market, as USDJPY has reached our 139.43 target at the same time that ES is approaching our 3902 backtest target.

continued for members…

The big picture: It’s hard to emphasize how important this range is for USDJPY. This is the .886 retracement of the drop from 147 in 1998 to 75 in 2011.

If it doesn’t pull back here – which would be nasty for stocks – it has only the 1998 highs standing between it and the IH&S target of 173.35 – seemingly targeted for May/June 2023. I can only imagine what another 20% drop in the yen would mean for inflation and interest rates in Japan. The 10Y is pushing 7 year highs.

And, anything above 0% is a problem when government debt is pushing 3x your GDP……and the BoJ is the only buyer.

Thankfully for the Japanese, oil and gas prices are still slipping lower.

Though the plummeting yen still leaves them at new highs.

Something has to give…especially since the euro zone is on the same path.

GC is trying valiantly to avoid new lows, while SI just tagged our 17.21 target. And BTC is hoping (in vain, I fear) to hold the line. Oil and gas prices can’t drop fast enough for the 10Y, which has one last chance today to put things right and start a deeper retracement.GLTA.