As is usually the case, when risk appetite improves, the Yen tends to soften, and thus was the case today in Asia. Stocks rose today on speculation that the US is near to announcing the creation of a ''Bad Bank'' that will help to take toxic assets off the hands of other banks. The outline of such a plan could be unveiled by President Obama as early as next week. The USD/JPY pair continued its rally begun in NY after a bottom of 88.48, and pushed its way to a high of 89.45 in trading that was still relatively thinned due to continued New Year celebrations across Asia.
EUR/JPY made nice gains as well, moving from early session lows of 117.07 to strengthen to levels near 118.37. The pair closed out the session about 20 pips under the high. The moves in EUR/JPY helped to boost the European single currency against the US Dollar as well. EUR/USD made strong gains in Asia from 1.3158 early lows to highs over 1.3265 as investors in the markets geared up for the US FOMC meeting at 14:00GMT tomorrow.
Although no interest rate cut is expected, what traders are looking for is any possible hint of a new plan of attack from the committee.

Keep in mind that tomorrow in the early Asian trade day will be the RBNZ rate decision at 20:00GMT. The consensus is that the bank cut New Zealand's lending rate by 100 basis points to 4%, the lowest rate on record....

Upcoming Economic Data Releases (London Session):

1/28/20097:10GE GfK Consumer Confidence Survey FEB 2.12
1/28/20097:50FR Consumer Confidence Indicator JAN -44-45
1/28/200910:30SZ KOF Swiss Leading Indicator JAN -0.39-0.5
1/28/200912:00US MBA Mortgage Applications 24-Jan-9.80%- -
1/28/200914:00US Fed's Open Market Committee Meets on Interest Rates, Economy 28-Jan
1/28/2009GE Consumer Price Index (MoM) JAN P 0.30%-0.30%
1/28/2009GE Consumer Price Index (YoY) JAN P 1.10%1.10%
1/28/2009GE CPI - EU Harmonised (MoM) JAN P 0.40%-0.40%
1/28/2009GE CPI - EU Harmonised (YoY) JAN P 1.10%1.10%