Unwinding of carry trades in response to renewed risk aversion was the dominant theme of the Asian session with reports of hedge funds being stopped out of recent JPY cross purchases, and with Japanese investor sales of EUR-JPY due to upcoming EUR bond redemptions adding to the JPY cross selling pressure. EUR-JPY fell from Asian highs of 131.50 to 130.33, and is well down from yesterday's Asian highs of 134.33. USD-JPY declined from morning highs of 99.14 to lows of 98.15. EUR-USD dropped from Asian opening levels around 1.3270 to lows of 1.3220. Asian stocks were broadly lower after the DJIA fall with the Nikkei also pressured by exporter losses in response to the stronger JPY. NYMEX crude remained under $50 and edged slightly lower on global demand concerns. Treasury yields remained low as well in the wake of the slide in U.S. retail sales. As an aside to the session, Fiji devalued their currency by 20% amidst political turmoil.
Al Bawaba
