Yen spikes higher as S&P revises outlook on Australia

The Japanese Yen is strengthening across the board following news that S&P rating agency has revised the outlook for Australian govt bonds to negative from stable. The current rating was maintined at AAA, with S&P warning they are watching the 'gridlock' in politics, which is likely to impact on the budget.

USD/JPY is exchanging hands at 100.80 last, near session lows, with the Nikkei 225 (-0.35%) having come under renewed selling pressure on the Australian news. It is worth reminding readers that the Nikkei News Agency reported earlier on Wednesay that both Saudi Arabia and Norway have recently been active sellers of the Nikkei 225 index, as part of a portfolio readjustment that has led to the decision of offloading Japanese equities.

USD/JPY key levels

Technically, Matias Salord, Analyst and News Editor at FXStreet, notes: "The next strong resistance could be seen between 101.90 and 102.20; that area should limit the upside, but if the pair breaks higher a rally toward 103.00 seems possible. On the opposite direction, renewed risk aversion could give strength again to the yen and volatility could soar if USD/JPY moves below 100.00, increasing speculations about official intervention to curb Yen's appreciation."