Japanese officials will have been pleased by the steady recovery

Focus has been on USD/JPY all week, and Friday was no different, and Japanese officials will have been pleased by the steady recovery seen after an early dip under 112.00. Earlier in the day, reports of a meeting between BoJ Kuroda, PM Abe and FX head Asakawa may have provided support, but going into US retail sales with a positive tone, the better than expected 0.2% rise on the month gave a fresh lift to take out 113.00 again. Gains were short lived, but no significant pullback as equities in the green today. US Michigan sentiment later in the day saw 5-10yr inflation expectations are record lows, curbing the USD recovery. EUR/USD was quick to react, having suffered through the day, with strong supported reaffirmed ahead of 1.1200. Another torrid day for Cable, which was well bid through early Europe to trade back up to the weekly highs, but was hit back down to fresh session lows just under 1.4450. Weak construction output, but once again, the ONS discounted the negative impact on GDP. However, GBP was a notable outperformer against the EUR. USD/CAD trade has been a little confused by a USD recovery (of sorts) and rising Oil, struggling through 1.3900. In the options market, we heard buyers of low delta AUD puts to cover the return of China (after some heavy losses in the Asia indices this week). Also for next week, we look to the FOMC minutes on Wednesday. RBA minutes on the day before. UK jobs, inflation and retail sales are also on the agenda, while German ZEW is standout in Europe.