• GBP/JPY +0.3%
• AUD/JPY +0.4%
• CHF/JPY +0.4%

GBP/JPY

Rightmove Lends A Hand: Lending to British pound strength in the relatively quiet session, the online real estate agent Rightmove reported housing prices that surged 2.7 percent higher.  A further suggestion that the sector is on the up and up, the report confirms that demand remains healthy as first purported by reports submitted by Nationwide and the Royal Institution of Chartered Surveyors.  The notion lent to strength in the underlying as the renewed demand may translate into increased consumer demand.  Additionally, it narrows the prospect for lower interest rates as policy makers hinted at slower growth in the New Year through last weekââ,¬â"¢s quarterly inflation report.  Separately, carry traders are looking strong in the GBPJPY synthetic as the current repurchase rate continues to offer better returns versus a zero interest rate policy in the Japanese yen.  Further strength looks to ensue in the cross pair till the realization of the central bank minutes and the CBI industrial trends survey mid week.  

Rumorville: Almost no orders for the yen as weak bidding looks to take place at118, keeping the major leg underpinned.  With selling interest noted at 1.7460 keeping the major under pressure, renewed bidding resides at the 1.7405 low.

AUD/JPY

Carry Trades Reinitiate: Further carry trade notions permeated the cross pair action as Australian overnight cash rates remain hovering above the Japanese short term rate.  This simple fact powered the AUDJPY cross pair during the session as traders stayed away from the market in observance of the U.S. Presidentââ,¬â"¢s Day holiday.  Nonetheless, participants who were in the market couldnââ,¬â"¢t ignore lower convenience store sales as they declined yet again in the Japanese economy.  Dropping 3.2 percent, the figure was slightly less than the 3.4 percent seen in the previous month and lends to a notion of stability as a bottom may have emerged.  The slightly better figures look to lend the underlying no strength in the near term, however, as interest rates continue to remain the overall theme in the markets.  Offering zero percent interest, the yen has been deemed the preferred carry trade off.    

Rumorville: Offers exist at 0.7430 in the underlying AUDUSD major, which could prove some resistance in the near term for the cross.  Should thin selling occur, look for higher valuations to emerge.

CHF/JPY

Euro Buying Spurs Tailing Swiss: Although not a preferred carry candidate, traders bid the CHFJPY during the staid session as franc tailing trading was sparked by mild euro interest.  Even so, with a 1 percent benchmark rate, Swiss franc denominations offer a higher yield and, as a result, were favored on the day.  Sparking the euro based push were German producer prices that accelerated at a 23 year high.  According to the Federal Statistics Office, a sharp rise in energy prices has pushed annualized producer price inflation to the highest rate since 1982, vaulting higher by 1.2 percent.  The recent report increases the likelihood of rising interest rates next month when the European Central Bank meets.  Separately, trade balance data for Switzerland is slated for release tomorrow.  Should the surplus rise, expect Swiss bulls to continue the push higher.     

Rumorville: Heavy offers look to keep the cross consolidating as the underlying major is set for a take back.  Selling pressure resides around 1.3090 and 1.3100 with stop orders rumored below those levels.

Richard Lee is a Currency Strategist at FXCM.