NZD/JPY regains its footing during the overnight before swinging wildly at Tokyo open

• The NZD/JPY driven lower on Tuesday, struggling to hold ground.
• A miss for Japanese Retail Trade may counterintuitively boost Yen as traders seek safety.

The NZD/JPY tumbled on Tuesday but seems to have regained its footing in the overnight session, trading just under 77.70 with price roiling as the Tokyo market opens.

The Kiwi is lifting during the overnights session to match its oceanic brother the Aussie, but upwards lift has been crimped by a decline in year-on-year Visitor Arrivals to New Zealand. Tourism numbers showed a decline of 0.5% last year, far below the 3.9% figure posted the previous period. Though Visitor Arrivals in itself is not a game-changer for the Kiwi, it does mark the continued sluggish pace of growth hampering the New Zealand economy, which has left the Reserve Bank of New Zealand (RBNZ) in wait-and-see mode on interest rate increases, with markets widely anticipating the RBNZ to stand pat well into 2020.

Also impacting the pair today is Japanese Retail Trade numbers. Retail Trade is coming in down across the board with the headline figure coming in at 1.6% year-on-year compared to the forecast 2.1%. Year-on-year Industrial Production is also a miss for Japan, posting 2.7% versus the anticipated 5.5% uptick. Only Large Retailers' Sales escaped unscathed, posting a minimal beat of 0.5% over the forecast 0.4%. Economic growth continues to underperform in Japan, but the Bank of Japan (BOJ) has remained dedicated to their 2% inflation target. The BOJ has been battling markets in the face of a strong Yen undermining their expansionary efforts, and the BOJ's constant bearish rhetoric may be having a definite though muted effect: the Yen has halted its steady march up the charts, and despite remaining elevated has shown signs of weakness as market participants warm up to the possibility of selling the Yen instead of buying it.

NZD/JPY Technicals

The pair is buried in bearish territory, but long-term support still remains as the 200-day SMA floats overhead and the 34 EMA continues to provide declining resistance. H4 charts show the pair still wrestling in a rough triangle, and a breakdown from here could see the pair testing the lower boundary before long, while current support sits at 77.65 and 76.90 with resistance at 78.15 and 79.25.