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Forex Flash: Japanese Yen rhetoric likely to calm ahead of G20 – BBH

Brown Brothers Harriman analysts suspect that Japanese rhetoric about the yen is likely to be more tempered in the run up to next the upcoming G20 meeting.

They feel that Japanese officials will still defend recent price developments as an unwinding of the Yen´s excessive strength, but will likely refrain from specifying comfort levels. The team write, “Japan is expected to report a small current account surplus for December, where the income from past investments offsets a little more the increasingly persistent trade deficit. Separately, there does appear to be a recovery in the industrial sector taking place and we expect this to be reflected with an increase in core machinery orders.”

Forex Flash: ECB and BoE expected to keep policies steady – TD Securities

TD Securities analysts point to central bank meetings (RBA, ECB, BoE) this week as the main attraction, which may explain the market’s reticence to extend positioning too aggressively at this point. “The recent trends that have characterized FX trading—EUR strength and JPY weakness—seem deeply entrenched in the market but the extent of the moves seen in the past few weeks—unusually persistent by recent standards—are starting to cause some second-guessing regarding their durability", wrote analysts Shaun Osborne and Greg Moore, expecting both ECB and BoE to hold its policy despite some analysts' somewhat dovish expectations. Key support for the EUR/USD is 1.34 area, while the GBP may bounce a little after BoE's decision.
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Forex: USD/JPY below opening price, capped at 93.18

Having breached above the 93.00 handle, the USD/JPY reached as high as 93.18 before entering a take-profit stage which pulled the pair back down below the psychological level. At 13:30 GMT, the market found its session low, and despite a little bounce, the price remains below the opening level.
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