Asia Session

The Yen started off the week with a good deal of strength as investors seem to think that there are bumps ahead in the road to the much heralded global recovery. With US consumer confidence sagging and a carry-over from Wall Street on Friday pushing Asian stocks lower by over 2% in China and Japan, the Yen crosses were sold early and often in the session. Lower equities helped to cast shadows on growth and traders were eager to take profits from higher yielding risk trades. EUR/JPY was at its session high just over the 134.50 level early, but as stocks headed south, the crosses followed, with the pair touching a low near 133.60. GBP/JPY took a bigger hit as it fell from the 156.50 area to just a touch over the 155.30 level, and AUD/JPY and NZD/JPY shed 100 pips and close to 80 pips respectively on the day.
USD/JPY broke the 94.85 level to the topside, but selling of dollars by Japanese exporters sent the pair below the 94.50 level. Japanese GDP data came in at 0.9%, and although lower than the 1.1% forecast, it showed that Japan has emerged from its worst recession since World War II. Although this data helped to make Japan one of the first economies to escape the recession, it was not enough to help curb the markets risk aversion.

Across the Pacific, the Dollar made gains although not as dramatic as the Yen. EUR/USD opened the week lower than Friday's close, but near its daily highs of 1.4190 and melted to under 1.4140 as trading progressed. GBP/USD gapped 30 pips lower on the open and quickly fled what turned out to be highs near 1.6515, and eventually landed near 1.6430. The high yielding Aussie fell over a big figure from 0.8310 to just shy of 0.8200. The Kiwi dollar also saw sellers push it 70 pips lower to 0.6690.

All in all, today was a day defined by a flight from risk, and with a relatively light week ahead for data, traders will be grasping for clues to the next big moves.

Upcoming Economic Data Releases (London Session) prior expected