The Yen has been on the back foot for the majority of this week and early Friday has been no exception. Apart from a Yuan fuelled spike to 118.12 from 118.47 the market has been bid from the European open. It is not too clear whether the Yen took a hit from the UAE view that the Japanese unit was not attractive for reserve diversification as it was already on the run vs Dollar when the statement was made.
The Dollar is around 150-points higher on the week vs the Yen as doubts over the path for Japanese interest rates dent the Yen's performance. With the US situation leaning more towards stability rather than a hard landing the focus has switched to the less hawkish stance currently being adopted by the BOJ's Fukui. USD/JPY could return to the 118.60 Nov highs but there is one last data run from the US and the housing starts could unsettle the order.
The other risk to the Buck could come from pre-weekend profit taking. G-20 will provide the Monday headlines, Japan, high yield and emerging ccys could be on the agenda.
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