JPY

More rate hikes and faster currency appreciation from CHina

From MNI's FX Bullets

CHINA: The PBOC set the yuan central parity rate vs the dollar at
CNY6.5345 Tuesday, vs CNY6.5310 Monday and CNY6.5301 set Friday, which
was a record yuan high. At Tuesday's parity rate, the yuan was up 26.65%
from July 2005's move to a managed float (with reference to basket of
currencies). In front page commentary Tuesday, the official China
Securities Journal stated that the Chinese government is likely to speed
up the pace of yuan appreciation to tackle imported inflation.The PBOC
has raised banks' reserve requirement 10 times and benchmark interest
rates 4 times in the current economic cycle. "The exchange rate tool
could be at the forefront, given the (already) intensive use of reserve
requirement and interest rate adjustments. It would help maintain the
flexibility of monetary policy," the newspaper said.


More tradable ideas on @alaidiPremiumFX

Ashraf

China is really serious about internationalizing its currency

From MNI FX Bullets

CHINA PRESS: China is likely to pilot a program this year which would
allow overseas companies to directly invest in yuan domestically, the
official China Securities Journal quoted Li Bo, a senior central bank
official, as saying. The People's Bank of China, the State
Administration of Foreign Exchange and the Ministry of Finance are
jointly working on trials for the policy, Li said.

Ashraf

MNI FX Bullets on What to Watch for USDJPY

DOLLAR-YEN: The pair is likely to trade with a softer tone today in
Asia following a decline in yields on Treasury notes. Yields on
Treasury's 10-year notes tumbled nine basis points to 3.41% on Friday
after data showed benign consumer inflation in March and slight decline
in five-year inflation expectations in Reuters/University of Michigan
Survey.

The market is waiting for U.S. economic data for implications
for the monetary policy. Data due this week are likely to show a pick-up
in housing starts to 535,000 in April from 479,000 in March, but a
decline in the Philadelphia Fed Survey's Index to 36.0 in April from
43.4 in the previous month.

The market will also watch for developments
in the sovereign debt problem in the euro-zone after Moody's Investors
slashed the debt rating for Ireland by two notches. The dollar is
likely to see some support at Y82.95, last week's low, while it is
expected to see resistance at Y83.74, the five-day moving average. The
rate moved from Y82.94, the lowest since March 31, to Y83.78 on Friday.


STubbs, i think it is very likely we will test below 134 in GBPJPY

Ashraf

From MNI FX Bullets

MNI DOLLAR-YEN TECHS: Holds Close to 200-DMA
RES 4: Y86.05/37 2% MAE, 38.2% of Y101.44 decline, High 13 Aug 2010
RES 3: Y85.91 Highs 30 Aug & 16 & 17 Sep 2010
RES 2: Y85.53/75 High 6 April, 38.2% retracement of decline from Y94.97
RES 1: Y84.25/49 Tenkan line, Former high 15 Dec
LATEST PRICE: Y83.44
SUP 1: Y82.95 Low 14 April, 21-day moving average
SUP 2: Y82.45/73 Parameters of Ichimoku cloud, 55, 100-DMA
SUP 3: Y82.29 High 11 March
SUP 4: Y82.09 38.2% retracement of Mar/Apr recovery
COMMENTARY: Dollar-yen holds close to the 200-DMA of Y83.4e following
recent downturn in the daily studies, which remain weak. Further
support is grouped within Y82.45/73, which includes the parameters of
the Ichimoku cloud as well as the 55 & 100-DMAs. The 5 & 21-DMAs provide
initial resistance & support, at Y83.80. Y82.95.


Ashraf