- Axel Weber says measures taken so far should be enough
- Kaletsky paints very grim European picture
- New Zealand PPI inputs -2.5%
- Commodity prices continue to tumble
- Talk Moody’s may downgrade Japanese bonds
- Regional stock markets fall between 1% and 2%
- Asian central bank seen buying EUR/USD and AUD/USD
Risk aversion trades were high on the agenda in early trade. EUR/JPY fell below 128.00 to a low of 127.65 before pulling back to 128.10. Stops in EUR/USD below 1.3450 were triggered soon after Tokyo opened and this set off the new bout of EUR/JPY selling, pulling the other JPY crosses lower as well. The Nikkei fell 3% soon after open and this added to the doom-and-gloom feel in the market. EUR/JPY traded as low as 126.99 before bouncing after an Asian central bank was spied buying EUR/USD and AUD/USD. Talk that a Moody’s press conference at 3pm Tokyo time would see some downgrading of Japanese bonds, corporate or government, saw further short covering on JPY crosses and USD/JPY.
Markets: Gold steady at $930/oz, Nikkei -2.9%, HK -1.4%, Kospi -1.3%, Shanghai -1.3%.
Ranges: EUR/USD 1.3424/90; Cable 1.5116/82; USD/JPY 95.57/96.19; EUR/JPY 126.99/128.20, AUD/USD .7451/.7510