USD-JPY and JPY crosses reversed almost all the losses made on Monday in Asia. Aiding the recovery was large USD-JPY and JPY cross buying at the Tokyo fix. In addition, initial gains in the Nikkei also supported the rise with the Nikkei bolstered by promises of news of more Japanese government stimulus measures today and a Kyodo report that the LDP will set up an entity to purchase stocks with public funds. In fact, talk of price-keeping-operations circulated earlier in the session. USD-JPY, which traded at lows under 96.00 in Asia Monday, opened in Tokyo around 97.35/40 and rallied to highs of 98.44. EUR-JPY which traded to lows of 126.41 on Monday opened at 128.40 and rallied to highs of 130.65. EUR-USD was supported by the cross activity, rising from 1.3185 at the Tokyo open to highs of 1.3274. Other currencies such as AUD, NZD, GBP and CAD followed a similar pattern to the EUR. Asian stocks were decidedly mixed today and even the Nikkei, after the morning rally, dropped 1% by the afternoon. Oil bounced back above $49 after the strong sell-off in NY on Monday while gold also corrected higher, rising over $2 to $918.40, also retracing part of the losses from Monday. U.S. Treasury yields were flat to mildly firmer.
