USD/JPY and the JPY crosses traded on a heavier footing in European trade after overnight losses in the Asian equity market. There were sell-offs in a number of key pairs, with speculative JPY shorts paring back positions. Offers were heavy on the topside and this limited USD/JPY's potential to rally and EUR/JPY also struggled to rallying out of the 154.30 low.
USD/JPY bid interest from 117.25 and down to 117.00 and below but some stops are seen mixed in, just below 117.00. EUR/JPY ran into some Japanese account interest ahead of the 154.20 10-day moving average and yesterday's low. GBP/JPY which plunged yesterday on sales out of Russia looked weak after giving up the 227.00 handle overnight and traded into 226.20. NZD/JPY and AUD/JPY looked better bid, supported by Japanese retail investor interest.
The European afternoon will focus on a stream of US data, with retail sales, business inventories and a couple of sentiment indicators on the slate. US Treasury Secretary is also due to speak. All these factors are expected to influence, although the equity market and further sub-prime news will determine price action.
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