A few hours before Jackson Hole conference in the United States, all the evidence encourage to be cautious about the Yen while the currency pair USD / JPY is now trading horizontally for nearly a quarter.

Traditional safe haven, the Japanese currency suffers from a trade deficit wider than expected at 517.4 billion yen in July against 275 billion expected. The global slowdown impacts exports and the government of the Land of the Rising Sun just lowered its assessment of the economy for the first time in ten months.

Taking advantage of low summer volumes, exporters also benefit from the burst of the dollar beyond JPY 79 to buy the Asian currency cheaply while, conversely, importers change yen into dollar at JPY 78, enclosing the currency pair within a narrow range.

Finally, mixed U.S. data do not offer more guidance while the final minutes of the Federal Reserve, which have suggested a future QE3, give particular importance to the upcoming international seminar of central bankers in Jackson Hole, where Ben Bernanke will speak Aug. 31.

Technically, volatility is expected this weekend and investors should stay away from the currency pair. If there is an announcement of a third round of quantitative easing in the United States, USD could go under JPY 78 but an intervention of the Japanese government still threaten sellers. In the opposite case, the threshold of JPY 80 could quickly be tested again.