Profit-taking in JPY crosses dominated the Asian session after the fall in the DJIA and subsequent weakness in the Nikkei on Wednesday. USD-JPY, which spiked to highs of 98.35 early in Tokyo trading, dropped to lows of 97.42 by the afternoon on the cross sales. The move down mirrored a fall in the EUR-JPY from morning highs of 132.59 to lows of 131.00. Currencies such as AUD, EUR and GBP consolidated during Asian trading after the slide in the NY session, but with bounces capped by the JPY cross sales. AUD-USD eased from 0.6995 but found bids ahead of 0.6940 while EUR traded mostly between 1.3440-1.3500. Cable was caught in a range of 1.4639-1.4718 during the session. In focus were the comments from PBOC adviser Fan Gang who said that China's economy had touched bottom. Japan Fin Min Yosano says Japan will not change the policy of investing in U.S. Treasuries. Asian stock markets were mixed with profit-taking capping gains on the Nikkei but good strength was seen in stocks in Taiwan, Seoul and Australia on signs of renewed fund demand. U.S. treasury yields edged higher on the optimistic note from China that the economy had reached the bottom. Gold bounced after sharp losses in NY while oil eased but remained above $53.
