USDJPY was lower after Japanese Finance Minister Taro Aso said he wasn't planning on buying foreign bonds as part of the new accommodating monetary policy.
On this we believe him because not buying foreign bonds is consistent with what G7/G20 has been saying. That is, our internal policies are our internal policies so if they cause currencies to realign that is just what it is. Buying foreign bonds to specifically target a weaker Yen would not be in keeping with this rhetoric and would likely focus the attention of the G7 and G20 on the Japanese.
These comments have caused USDJPY to pullback 0.55% to 93.43.
Our view is that we find it hard to get too excited about a push of USDJPy up through the recent highs at the moment given all our usual indicators which are flashing warning signs. But we would add that unless USDJPY falls down into and through the 91.90/92.30 region the rally is intact for the moment.
Sterling also remains under pressure as many worry that there is a much looser monetary policy coming under the new Governor Carney. Tonight's release of BoE minutes will be important in the short term but Sterling remains pressured and we believe the break of the trendline that stretches back to September 2008 in the past week is a decisive trend change but a break of 1.52 is required to kick GBP toward 1.42 against the US dollar.
Elsewhere the Aussie remains a messy chart but is very close to breaking up through the 1.0373/75 region which would kick it into the next higher range. The Aussie benefitted from the more ebullient tone and the weaker US dollar, rising 0.55% from a low of 1.0298 to a high of 1.0367 sitting just below it at 1.0361 this morning. A further push higher is on the cards. The chances are high.
On global stock markets rumours of more M&A in the office supplies sector with Office Depot apparently in talks to acquire Office Max helped push us stocks higher with the Dow up 0.39%, the S&P up 0.74% and the Nasdaq 0.69% higher. In Europe as a result of the mcuh stronger than expected german ZEW surveystocks in Europe rose sharply and hard. The DAX rose 1.62%, the FTSE was 0.96% higher, the CAC pushed up 1.88%, Milanese stocks rose 1.57% and Madrid rose 1.43%.
On commodities Gold looked weaker again overnight with a little rally fading and gold sits at $1602.80 oz for its weakest close since last August. Silver fell 1.43% to $30.00 oz with a low just above the bottom of the wedge it has been in for a while now. Nymex crude was up 0.72% to $96.55 Bbl as it dances in the range and the Ags were mixed with Corn down 0.50%, Wheat fell 1.38% but Soybeans surged 3.21%.
Catch me on Twitter @gregorymckenna