- Massive moves overnight saw the EUR/JPY fall to a low around 127 in NY as risk aversion returned with a vengeance
- EUR/JPY opened in Asia at 128.85, USD/JPY at 92.90 and EUR/USD at 1.3880.
- First signs of Japanese verbal intervention
- Market again focusing on Toshin maturities due this month pressuring NZD/JPY and AUD/JPY
- Australian unemployment rate at 5.8% Vs 5.9% expected
- Chinas domestically made auto sales rise by 36.5%
- China think tank sees economy growing by 8%
- South Korea keeps base rate unchanged at record low 2%
- ECB warns about growing demand for Euro banknotes outside the EUR zone
The first move was down in early Asia with the market still spooked by the major overnight moves. Jobbers and market makers stayed in bed and this left very poor liquidity in the market and accentuated all moves. EUR/JPY fell to its session low at 128.10 and AUD/JPY fell to 71.70 before both recovered on profit taking out of Tokyo and the fear of actual intervention.
EUR/USD and cable are playing second fiddle to the cross currencies. USD/JPY got back towards it’s 93.50 breakdown level but ran into resistance. EUR/JPY couldn’t manage to get back above 130 as stale longs bailed out of their positions. AUD/JPY may well remain the big mover as latest data show that AUD/JPY longs were twice as big as the EUR, USD and GBP/JPY longs combined and had risen by 30% in the week to July 7th.
Ranges: EUR/USD 1.3859/1.3915; USD/JPY 92.38/93.51; EUR/JPY 128.10/130.00; AUD/USD .7751/.7821; cable 1.6030/1.6108.
Markets: Nikkei -0.9%, HK -0.5%, Shanghai -0.2%, Kospi +0.25%. Oil +$1 @ $61/bbl. Gold steady @$912/oz.