Sydney, March 23: The USD/JPY is testing hourly support around 118.00 after a few selling flows in the EUR/JPY went through in early Asia. The cross has moved down to 157.30 from 157.43 as a result of the selling flows. A clear break below 118.00 could see the USD/JPY drift towards 117.50/80 before more buying emerges. The USD/JPY trades 117.99/118.04

Sydney March 21. After falling swiftly following overnight data releases, the USD/CAD is likely to remain heavy with CAD repatriations from the oil industry out of the US expected on Thursday and Friday of this week. Offers are now seen starting at 1.1665 and being especially heavy around the breakdown level of 1.1720. The technical bear target for this move is the 38.2% retracement of the 1.0930- 1.1880 which is at 1.1520.

Sydney March 19. The Chinese decision to raise rates 27bps in a bid to control inflation and growth at the weekend has resulted in a stronger JPY and softer commodity currencies in early trading. The USD/JPY closed in NY around 116.70 and has traded down to 116.31, the EUR/JPY closed at 155.40 and has tested 154.91, while the EUR/USD opened around 1.3237 and dipped to 1.3205.

The AUD closed in NY at 0.7963 and has traded in a 0.7932/50 range and the Kiwi closed at 0.6975 and has seen 0.6944/65.

The response of the Asian equity and commodity markets to the Chinese rate rise will be the key for the currencies in Asia today.

Sydney, March 16. Japan’s index of tertiary activity, largely services, rose 1.6% in January, a bit faster than IFR’s forecast for a 1.2% gain, reflecting the bounce in retail activity over the month. Retail sales surged 2.3% over the month, the strongest rise in a year, though they are likely to fall back in both February and March reflecting a strong seasonal pattern that is somehow not stripped out in Japan’s seasonal adjustment process. As such, tertiary activity is similarly likely to give up most if not all of January’s gain in the next two months, so this is not a number to get overly excited about–this data in no way heralds a ‘consumption recovery’ that some in the market are talking about. Against a year earlier, activity rose only 0.9%, as IFR had expected. This was the weakest performance in 2-1/2 years with growth slowing from 1.3% in November and December, and down from 2.3% a year ago. Trend growth has firmed, but again that reflects the strength of January (and October), the only two months of the past five to show any increase.

As generally expected, the Nikkei plunged in early trading, opening gap down at 16,936.19 and trading down further to 16,803.86. It has come a bit but remains heavy, indicated at 16,811 or down 367 points on the day. This is a bit over 2%. Depending on where the index goes from here, further JPY buy-backs may be seen as the market pares back risk assets. The Shanghai and Mumbai exchange opens will also likely to eyed carefully

Sydney, March 9: The EUR/USD has traded with a firm tone in Asia today ahead of key US data later today. The release of US non-farm payrolls and US trade numbers just might shake the EUR/USD out of the very tight ranges that have prevailed in recent weeks. The market is looking for the US economy to add 100K new jobs, but there is a wide range of expectations with some looking for as low as 42K with 165K the top end of expectations. If it comes in at the low end of that range it will leave the USD vulnerable amid raising concerns that the US economy is slowing. It is obvious from the price action over the past 24 hours that the market still holds relative yields as a key factor for the FX market so the USD may come under pressure if US yields fall as a result of the job data. The US trade deficit blew out above 60 BLN USD last month and was followed by much lower than expected TIC data. While the FX market will be focused on the US payroll numbers, a trade deficit greater than the 59.7 BLN median could weigh on the USD. Some analysts feel that for once the market is looking for a weakfish payroll number so an upside surprise would have the biggest effect and see the USD move substantially higher. If that were to be the case we should expect stops below 1.3115 get triggered and a move towards key support between 1.3070/80 ensue. The EUR/USD trades 1.3152/57