• EUR/JPY -0.7%
• GBP/JPY -0.9%
• AUD/JPY -0.9%

EUR/JPY

Tightening Speculation Boosts Yen: The euro single currency lost out to speculation that the current loose monetary policy in the Japanese economy may come to a quicker end than previously anticipated.  Stating earlier that two consecutive price increases at the consumer level would be required before such a decision, BOJ Governor Fukui is set to meet with policy officials this week in reviewing monetary policy.  Although anticipated to keep things the way they are, market sentiment is speculating on any suggestions that will lend a hawkish bias to usually dovish language.  Futures traders look to be adding to current sentiment.  According to the weekly Commodities Futures Trading Commissionââ,¬â"¢s commitment of traders report short bets on the Japanese yen have risen to the most since early December.  Usually referred to as a contrarian tool, the report may be suggestive of near term unwinding as interest begins to be sell-heavy.

Rumorville: Keeping the underlying propped, bids located at 141 formed the support figure during the session and continues to push the cross higher.  Further interest lower looks to continue to form a foundation at 140.90 and 140.80 in the near term.  Subsequent stops are below at 140.60/70 area.

GBP/JPY

Pound Data Lends No Hand: Although still offering a wide carry spread, positive yen speculation spilled into the GBPJPY cross currency pair from the major USDJPY pair selloff in New York.  The bearish momentum pushed the currency lower continuing the previous two session decline.  Adding to sterling downside, retail sales were paltry, although positive for the United Kingdom according to the British Retail Consortium in the month of January.  Climbing a thin 0.2 percent, the results posed as the worst start of the year for the survey since its inception approximately 10 years ago.  Nonetheless, the increase for the third consecutive month, coupled with housing price stabilization, is lending to strong sentiment that rates may not be cut in the near term.  This notion should prop the underlying in the near term following consolidation of previous decline. 

Rumorville: Boosting intermediate pound bid interest looks to be bids on the major leg of GBPUSD at 1.7405/10 with minor stops below at the even price.  Comparatively selling pressure comes in higher up at 1.7575 and looks far fetched at this point.  Separately, yen pressure continues to reside at 118.20 with stops above at 118.40.  Bids on the downside look to prop the USDJPY major leg with interest from asian importers at 117.70.

AUD/JPY

Traders Anticipate Unchanged Decision: Interest was to the downside for the Australian major ahead of the anticipated Reserve Bank of Australia meeting.  Expected to keep rates at the current 5.5 percent, traders are hungry for some hawkish rhetoric following Mondayââ,¬â"¢s inflationary data that may boost the underlying in the near term.  Previously, bears have pounded the underlying pair over the past week as future growth prospects seem compromised on slower consumer interest.  Should further dovish statements accompany the ultimately decision, traders would likely continue the near term downtrend that has plagued the currency since the beginning of the month. 

Rumorville: Bids remain at the 7400 handle, rumored to be reserved for protection of option barriers at that level.  Offers continue higher at 7450 with plenty of sell interest should the figure fail.  Further offers look to reside at 7350.

Richard Lee is a Currency Strategist at FXCM.