The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 5-1/4 percent.

All market traders are waiting for FOMC decision.
We think on positiove decision USD will gain not more than 100 pips in EURUSD and USDJPY. And then it will turn down extreamly fast.

Our recommendation is STAY ASIDE.

TOKYO - A majority of respondents in a nationwide survey say Bank of Japan Governor Toshihiko Fukui should resign for profiting from his investment in the troubled Murakami fund, the Asahi Shimbun newspaper reported Tuesday.

Sixty-seven percent of 1,965 valid responses in an Asahi random telephone survey over the weekend said Fukui should step down. Just 25% disagreed.

The Asahi survey showed that 70% of respondents said trust in the BOJ’s monetary policy had been hurt by Fukui’s action.

The paper said 80% said there was a problem with the investment while that only 15% said otherwise. Fukui has come under fire from opposition parties for a personal investment in the fund he made seven years while he was in the private sector and kept after he returned to the central bank to assume the top position.

Both the government and the BOJ said Fukui did not break any law or internal rules on personal assets and investment, but the central bank is considering stiffening its code of conduct for top executives.

The founder of the fund, Yoshiaki Murakami, was arrested this month and has been indicted for insider trading. Murakami was once hailed as an activist for shareholders’ rights but was later condemned that he was merely interested in seeking financial gains from stock trading.

Fukui has repeatedly said his investment was aimed at helping the young entrepreneur at the time, when Murakami was advocating for greater corporate governance among listed companies.

Fukui said he asked the fund to cancel his investment in February, which would take effect at end-June at the earliest, after concluding that Murakami had deviated from his initial goal.

The BOJ chief said he will donate both the principal and gains from the Y10 million investment he made, which had more than doubled at the end of last year.

SYDNEY June 27 - The US dollar was trading lower against the major currencies, while the euro is gaining following hawkish comments from European Central Bank officials overnight, dealers said.

But, they said, the clear focus this week is Thursday’s expected 25 basis point interest rate hike by the US Federal Reserve which will underpin support for the greenback ahead.

At 9.55 a.m. in Sydney (2355 GMT), the euro was at $1.2597, up from $1.2587 in late New York trade while the US dollar was trading at Y116.15 against the yen, down from Y116.25 in New York.

Commonwealth Bank senior economist John Peters said in a market note the Federal Reserve’s accompanying statement on Thursday is likely to retain a hawkish tone and to reiterate that future monetary tightening will remain data dependent.

He said this is evident by numerous Federal Reserve speakers in recent weeks expressing discomfort over the recent pick-up in core inflation and the risk of escalating inflation expectations.

Dealers said the euro rose to a high of $1.2605 overnight from $1.2502 following hawkish comments from ECB officials, while the US dollar traded between Y116.09 and Y116.49.

They said ECB member Nout Wellink commented inflation risks had increased, while another member Yves Mersch warned of a possible 50 basis point hike at the August 3 meeting.

Dealers said further speculation of central bank reserve diversification from US dollars into euros also helped the single currency.

Dealers said currency markets may react to tonight’s release of data in the US including the Conference consumer confidence survey for June and existing home sales for May, but the real focus is Thursday’s central bank action.

USD/JPY managed to trade up to 116.60 Friday, effectively closing out the post-G7 gap dating back to April 24. Offers there, some from Japanese exporters, helped cap the topside, sending the pair back down. Stops were eyed on a break above but look to remain intact. These stops could come back into focus should the move up again. This does not seem all that likely today in Tokyo. After rallies, it has been almost custom for Japanese exporters to take advantage of the higher levels. They were likely to be hedging out to year-end now. With swaps just under 300 pips, they could effectively lock in 113 for the calendar year and a little beyond. The floor for USD/JPY does look to be moving progressively higher however, and support today is seen at 115.90-116.00, 115.94 as low as it got in New York Friday. London saw a low of 115.95, a tick higher. The 200-day moving average comes in at 116.03 today. Some stops are seen below the 115.90 level but more support is eyed down at 115.75-80, 115.77 the low in late Asia Friday, and then at 115.50. Topside resistance is eyed at 116.60 and then ahead of 117.00. USD/JPY currently trades 116.40/43.

USD/JPY cruised through option barriers at 116.00 overnight. Stops above took the pair up to as high as 116.29. Rumor and innuendo helped push up a market already biased higher. Reports that an US spy plane was shot down over North Korea, subsequently denied, and talk of a possible BoJ Gov Fukui resignation made the rounds. It was the latter which eventually took the market above, tripping large stops in the process. Although there is still a small possibility that Mr Fukui may resign, Mr Fukui remains among the most respected in the financial community and the chances of him staying look to be growing with Mr Fukui himself ready to ride out any further storms regarding his investment portfolio. The view that recent financial scandals surrounding Mr Fukui would tend to support the case for a later and less hawkish BoJ also look to be on the up-and-up. The government no doubt feels it has the upper hand over the BoJ now politically.

USD/JPY is likely to trade heavy today despite the continuing upside bias in the pair. Japanese exporters are likely to be busy, locking in spot on the 116-handle. Prior to the break up, this block noted its interest in selling up to 116.60, the top of the post-G7 gap. EUR/JPY could also trade heavy with institutional investors repatriating some of the E15 bln or so in EZ bond redemptions due today. Chart resistance topside is seen at 116.25-30 and then at 116.60. Support below is eyed at 115.50-60, 115.56 the low in New York overnight, and then around 115.25. USD/JPY currently trades 116.01/06

our position was closed by stop with loss of 45 pips.

We have just sold USDJPY at current spot 115.48 (stop 115.93) target 114.48