Asia Session

The Euro continued its recent climb against the Dollar and the Yen early on, but a quick scare sent investors scrambling to buy the Yen as the session progressed and the Bank of Japan rate decision was looming. The EUR/USD tripped early to a session low just over 1.3000 as it stumbled out of the gate in Asia but found the legs to get back up to 1.3057, a session high, but not in fact high enough to break through Mondays high of 1.3071. The Euro has been firmer with the new found confidence after a surprisingly strong US Housing starts number as well as stronger equities and German data from yesterday. With the economy looking less chaotic and gloomy, players are exiting the US Dollar in hope of finding better returns. EUR/JPY took off from a humble open of 128.35, and blasted off to just over 128.80 until the hiccup of rumors that AIG was going to be ''brought down'' by the US government hit the wires, the pair fell to 128.01 as the news was digested. Ultimately the AIG rumors were dispelled as being a misquote, and the pair is currently back near 128.35 as Asian equities struggle to hold gains which saw the Nikkei back up over 8,000..

USD/JPY was higher ahead of the BoJ rate decision which many felt was a nonevent as rates would remain at 0.10%, which they did. However, the BoJ did throw in some stimulus for good measure in the form of increased government buying of Japanese Bonds, (JGBs).
USD/JPY shot from 98.84 highs to near 98.25 initially, until finding its legs closer to the 98.50 levels I am now seeing. From here on out the story will be the upcoming US FOMC meeting at 18:15GMT, in which the consensus is that the rate will be left unchanged. The real story will be if anything new is brought to the table by the FOMC as many see the process of cutting rates already below 0.50% as the equivalent of shooting blanks.

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