Gold is steadily making new highs, the latest at $1225/oz, and both the Nikkei and HK are up over 2%. This has manifested itself in the FX markets as higher JPY crosses. EUR/JPY, GBP/JPY and AUD/JPY are all marching higher. It seems that the market is returning to the JPY as its preferred carry-trade funding currency as opposed to the USD with signs that the US economy may be spluttering back to life and the Fed’s easy monetary policy may be getting fractionally tighter and with TARP funds now being repaid.