The chart shown has implications that may or may not prevent Japan from getting sucked into a deflationary black hole. However, the chart is quite clear on the question of whether BOJ will be successful in its longstanding goal of trashing the yen. (Answer: Yes, very.) The small rally in early October from around 0.9001 validates the pattern itself, and the decisive progress beneath that level since implies that the D target at 0.7332 is likely to be reached. This will obviously benefit Japanese exporters, but it will also put more pressure on manufacturers in the U.S. and elsewhere that compete with them. Traders should position from the short side until the target is reached, but be alert for a rally back up to the red line, since that would set up a ‘mechanical’ short to the target using a 0.9418 stop-loss. That’s far more than we would ordinarily risk, but you could cut it down to size by using the ‘camouflage’ technique. When appropriate, ask in the chat room if you’re uncertain about how to do this. ______ UPDATE (December 9, 8:03 p.m.): I’ve switched to the March contract with an intraday chart (see inset) that shows a robust rally beginning from above an 0.8183 correction target. Although there are outstanding targets well below these levels on the longer-term charts, we should pay heed to any rally that begins as this one has. While it’s true that the rally failed to clear the external peak at 0.8493 recorded on December 1 — a mild sign of timidity — we’ll give buyers more time to see if they can summon some real gumption. _______ UPDATE (December 10, 6:09 p.m.): The slight penetration of a midpoint resistance at 0.8476 suggests that this dead-cat rally will continue to at least 0.8613. _______ UPDATE (December 12, 2:20 a.m.): The rally reversed off a bull-trap opening, and although the 0.8613 target will remain valid unless 0.8339 is exceeded to the downside, the futures looked lower at the close: to 0.8383, a midpoint Hidden Pivot that can be bottom-fished with a tight stop, or to 0.8347 if any lower.