• BOJ’s Shirakawa: Yen rise has both merits and demerits for Japan economy. On nominal basis yen levels not necessarily strong (I still haven’t gotten over these comments. To make them when the BOJ is intervening beggars belief) – USD/JPY slumped as soon as they hit the wires and hasn’t recovered
  • BOJ’s Shirakawa: Strongly hope MOF intervention leads to stable fx
  • Japan vice FinMin Igarashi: Believes intervention isn’t over
  • Honda CFO: It would help if DLR/YEN stayed at 79 yen. But not hopeful for lasting impact of solo intervention
  • ECB’s Paramo: ECB in principle is against unilateral intervention. Solo intervention not good for global stability
  • 10 year Italian govt bond yields match highest since August at 6.1%, up 8 bps on day
  • ECB seen buying Italian and Spanish govt bonds
  • Bank of Spain says sees flat q/q, +0.7% y/y GDP growth in Q3. Sees risks Spain will not meet 2011 deficit target of 6%/GDP
  • Bank of Korea may have bought at least $300 mln to smooth wons’ gains Monday – Traders
  • German September retail sales +0.4% m/m, +0.3% y/y, weaker than median forecasts +1.0%, +0.9% respectively
  • French September producer prices +0.2% m/m, pretty much in line with median forecast of +0.1%
  • Kuwait Central Bank head: Euro zone debt crisis still overshadowing economic recovery
  • SNB says is reporting a consolidated profit of CHF 5.8 bln for first three quarters of 2011. Net result from SNB foreign currency positions is around CHF 0.3 bln for first three quarters

All about USD/JPY this morning. BOJ has continued intervening throughout the European morning with no joy. We’re down at 77.85 from around 79.15 when I sat down. Early selling ran into determined BOJ bids both at 78.90 and 78.80 and we rallied back above 79.00 to around 79.10.

Then comments from Shirakawa (first headline) hit the wires and we were quickly moving lower. Comments from Honda CFO and ECB’s Paramo (see above) hardly helped matters.

As reports circulated that the BOJ was pulling it’s bids in the wake of the inopportune Shirakawa comments, so we sold-off quickly. Eventually the BOJ reappeared at 78.00, but a lot of damage to their efforts had been inflicted.

EUR/USD effectively unchanged around 1.4000. China has been seen buying the pairing this morning, probably helping negate renewed euro zone periphery jitters. ECB again seen buying Italian and Spainish govt bonds.

Buy orders seen clustered 1.3950/70, stops below there.

Cable up marginally at 1.6010 from early 1.5980.