• Japanese PM Hatoyama resigns
  • Japan FinMin Kan says to run for ruling party head position
  • Canadian FinMin in Shanghai: 2010 GDP seen at 3.3%. No firm plans on interest rates for rest of this year, will wait and see. Inflation always a concern. Euro zone crisis doesn’t change pressure on China to have flexible currency
  • Spain May jobless down 1.8% vs April to 4.06 mln – Labour Ministry
  • Central Banks in Brazil, India, Japan, S.Korea won’t stop investing in euro - Govt sources say in seperate Reuters interviews
  • Iran’s central bank says to sell 45 bln euros from fx reserves to buy dollars, gold. Sales will be done in 3 phases, first has started – Xinhua
  • Russia C.Bank’ Ulyukayev: Sees euro’s position as reserve currency as stable “for years” – IFAX
  • German FinMin: Not all banks are out of the woods yet
  • UK April mortgage approvals 49,871, slightly higher than median forecast of 49,250
  • UK construction PMI 58.5 in May vs 58.2 in April. Better than median forecast of 58.0 and highest read since Sept 2007
  • Euro zone April producer prices +0.9%, firmer than median forecast of +0.7%
  • S&P: Japan regional banks face falling core profitability

Maybe it’s me, but that seemed a funny sort of session. I can’t make out whether it was quite active, or really quite listless. Guess it depends what you were trading. Anyways, main feature has been yen weakness in wake of Hatoyama stepping down as PM. Markets don’t like uncertainty and usually punish it.

USD/JPY up at 91.90 from early 91.45 having been as high as 92.04 at one stage, EUR/JPY up at 112.35 from early 111.65. Talk of stops up at 92.10/15 and just above 113.00 respectively. S&P also came out with report. They feel Japanese regional banks face falling core profitability, which hardly helped the yen.

EUR/USD at 1.2220 largely unchanged on day. Sovereign interest on both sides of the market. Sovereign buying down around 1.2200/10 has lent some support, but there is still evident caution of extending upside very far. BIS seen seller above 1.2220 in early trade but didn’t stop the pairing eventually reaching session high 1.2275 before capitulating to another wave of selling.

Cable at 1.4680 showing little net change on the day. Inbetween though we got as high as 1.4769 before a strong short covering rally in the EUR/GBP cross helped pressure the spot pair lower. EUR/GBP got as low .8281 before rallying strongly to session high .8360 amid talk of a UK clearer buying aggressively. Cross presently at .8330.