- Another negative day on Wall Street saw JPY crosses under pressure in early trade
- USD/JPY fell below 92.00 but the prospect of semi-official buying from entities like Kampo dissuaded the market from trying too much.
- Australian balance goods/services -AUD$1.56bln versus AUD$850 million expected
- Most regional equity markets opened slightly lower but comments from the Chinese regulator helped fuel a modest rally
- Gold has slipped back slightly after gaining over $20 overnight.
There is expected to be some concerted intervention in USD/JPY around the 91.80 level as it is well known that there are lots of stops now building below 91.50 and 91.00. The market may well decide to test the resolve of the new government to intervene in currency markets. Early Asian trade saw a low of 91.95 printed but the momentum was missing especially when regional equity markets didn’t fall heavily.
EUR and GBP were relatively quiet, moving first down and then back up along with the JPY crosses. The AUD fell briefly after somewhat disappointing balance of trade data but it has also recovered on the back of JPY cross short-covering.
Ranges: EUR/USD 1.4353/82; USD/JPY 91.95/92.37; EUR/JPY 131.15/88; AUD/USD .8316/64; cable 1.6239/84.
Markets: Nikkei -0.25%; Shanghai +3.5%; HK +0.9%; Kospi flat. Gold -$2 at $976.5/oz; Brent crude flat at $67/bbl.
