Previous session overview
Brushing aside the escalating war of words by Japanese officials directed at the rising yen, risk-averse investors piled into the safe-haven currency Wednesday, pushing it to a new 15-year high against the U.S. dollar.
The dollar fell to a fresh low of JPY83.34, compared with JPY83.80 late Tuesday in New York. The dollar was at JPY83.49 as of 0450 GMT.
Japan Finance Minister Yoshihiko Noda was the latest official to warn markets that Japan was ready to act, specifically raising the specter of intervention for the first time.
The ICE Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, was at 82.721 from 82.815 late New York.
The euro also fell against the yen and was hit by the continued focus on potential problems among European banks.
The euro fell to JPY105.80, its lowest level since Aug. 24, and down from JPY106.33 in late New York trading. The euro was at JPY106.10 as of 0450 GMT.
The euro was little changed against the dollar. It was at USD1.2709 from USD1.2689 in late New York trade.
The Pound was weaker against the greenback but made good gains against the souring Euro. The Pound found support at USD1.5300 and bounced in the US session.
The Australian dollar hugged a tight range against the U.S. dollar in Asia Wednesday but had a strong session against key crosses as investors shrugged off political headwinds blowing from Canberra to focus on employment data for August on Thursday.
Market expectation
Market participants are watching how U.S. authorities handle the economic stimulus package now under discussion, and whether there will be further monetary easing.
Analysts said Yoshihiko Noda comments showed greater seriousness among Japan's authorities toward the possibility of direct intervention, something they haven't done since 2004. But there was still skepticism as to whether intervention would actually happen.
Risk aversion could tip sterling lower against the dollar Wednesday, though the pound is favored to nudge higher against the euro.
The outlook for EURCHF remains bearish and its decline below 1.2852 opens the way for downside losses to 1.2501 and then 1.2403, according technical analysts. Financial sector woes are depressing the euro, and analysts look for more downside over the medium-term. EURCHF faces upside resistance at 1.3163.
Most important events of the day
| 8-Sep | Count. | Event | For | Unit | Imp. | Act. | Cons. | Prev. |
| 0:00 | EU | ECB Governing Council Member Weber speaks at the Handelsblatt Jahrestagung | Low | |||||
| 5:00 | JP | September Report | Low | |||||
| 6:00 | DE | Current Account (nsa) | Jul | EUR bn | Med | 9 | 11.5 | 12.7 |
| 6:00 | DE | Trade Balance | Jul | EUR bn | Med | 13.5 | 13 | 14.2 |
| 6:30 | FR | BoF Business Sentiment | Aug | Index | Low | 101 | 101 | |
| 6:45 | FR | Trade Balance | Jul | EUR bn | Low | -4.1 | -3.8 | |
| 6:45 | FR | Central Govt. Balance | Jul | EUR bn | Low | -90.2 | -61.7 | |
| 7:00 | ES | Industrial production (wda) | Jul | % y/y | Low | 2.8 | 3 | |
| 7:30 | SE | GDP (sa) (Final) | Q2 | % q/q | Low | 1.2 | 1.2 | |
| 7:30 | SE | GDP (wda) (Final) | Q2 | % y/y | Low | 3.7 | 3.7 | |
| 13:00 | CA | BoC announce key policy interest rate | Low | |||||
| 13:00 | BE | GDP (Final) | Q2 | % q/q | Low | 0.7 | ||
| 13:00 | BE | GDP (Final) | Q2 | % y/y | Low | 2.2 | ||
| 16:00 | LU | Prime Minister Juncker, ECB Council Member Mersch and European Investment Bank President Maystadt speak at the Economic and Monetary Union | Low | |||||
| 18:00 | US | Fed release Beige Book | Low | |||||
| 18:30 | US | Federal Reserve Bank of Minneapolis President Kocherlakota gives speech on "Inside the FOMC" at a business leader's luncheon | Low |
