US$ Better Bid Against G10, except Yen

Tokyo (Feb 2) Thin volumes traded in Asia as the majority of Asian markets were closed due to Lunar New Year celebrations. The Japanese CPI grew faster in December (+1.6% vs. 1.5% exp. & last), while the jobless rate eased from 4.0% to 3.7%. Despite good economic news, JPY crosses remained offered in Tokyo, the Nikkei stocks lost 0.62% amid rumors that Japanese fund managers cut their equity allocation from 45.3% to 45.0% in December. USDJPY eased from 102.94 to 102.33 alongside with Nikkei 225. Trend and momentum indicators remain negative and we see higher selling interest below 101.70/77 – lowest levels hit over the past two months. EURJPY extends weakness to 138.67 with key support seen at 100-dma (at 137.50 currently).

Downside pressures intensify on EURUSD amid the Fed decided to keep on going with tapering this Wednesday. The post-FOMC reaction low of 1.3543 has been shortly broken as Europe walked in this morning. The MACD stepped in the red zone suggesting the extension of losses. The key support remains at 1.3500/24 (fibo 61.8% on Nov-Dec rally), if broken will shift the focus to 200-dma (today at 1.3378).