EUR/JPY traded higher overnight in Asia and has extended the rally in early European trade. The cross is presently up at 138.40 having closed out around 136.00 in North America Friday. General sentiment is seeing some cautious improvement, with the Nikkei putting on 300 odd points overnight. Risk aversion tendancies were also softened by the South Korean government’s move, announcing a package of foreign currency payment guarantees for banks worth US$ 100 bln, which inturn helped strengthen the KRW. The forex market will be looking for European stockmarkets to perform well this morning to help support this budding EUR/JPY rally.