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Forex Flash: Risk of Japanese upheaval abates – UBS

FXstreet.com (Barcelona) - The USD/JPY managed to break to a new multi-year high of 97.20, but surrendered gains after trading in JGB futures was temporarily halted. JGB yields gyrated widely in illiquid conditions in the wake of Thursday's aggressive easing by the BoJ. The 10y yield opened sharply lower and then swung within a 32.5 bp-65 bp range – at one point climbing back above levels which prevailed before Thursday's BoJ announcement.

Meanwhile BoJ Governor Kuroda had his governorship reconfirmed by both houses of parliament. The original confirmation several weeks ago authorized Kuroda to complete the remainder of Shirakawa's term (following his resignation three weeks early). The reconfirmation overnight now allows Kuroda to begin his five-year term proper on April 9th.

According to Research Analyst Gareth Berry at UBS, “Although the votes were largely just a formality, there was always a very small risk that Thursday's bold easing might have ruffled some parliamentary feathers – that risk has now vanished.”

Forex Flash: US NFP risks to the downside by uncertainty from sequestration – TD Securities

The last big event in the market this week is the US nonfarm payrolls report today: “The positive momentum in US labor market activity should be sustained in March, with the economy adding a further +195K jobs”, wrote TD Securities analysts. “While this will be a slowdown from the robust 236K pace in February, it is in line with the 6m trend”, they continued, adding that growth should be broadly-based, reflecting the improved tone in economic growth performance in Q1. “Notwithstanding this constructive view, and believe the recent initial claims/ADP report suggest downside in the coming months, risks are tilted to the downside reflecting the uncertainty on the impact from sequestration”, they concluded.
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Forex: EUR/JPY side-lined around 124.00

The pair is losing ground on Friday albeit keeping the area around 124.00 ahead of the US Payrolls due later, reflecting the consolidation pattern prevailing in both the Japanese yen and the single currency...
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