Is $/Yen Poised For A Bounce?

The yen has rallied over 6% in a little over 4 weeks (not counting the slow X-mas period) to reach the key 114 level. It seems people are well-positioned by now for more $ weakness this year. However, the yield advantage of the $ cannot be ignored completely. Fed fund rates are likely to rise at least one more time to 4.50%. Technically speaking, the 113.75 level is a very good trend line support (below which we will probably see the 200-day moving average around 112 pretty quickly!). We could therefore see a short-term bounce from here, perhaps toward 116.50 or so... especially if the trade figures tomorrow surprise on the positive (less negative) side... Longer-term, I am still quite convinced that the yen will see 110 before 120 (if ever). I correctly predicted the original correction from 121. Let's see if lightning can strike twice as far as this potential short-term bounce is concerned...