[cppene]

With US Treasury yields lower overnight, pressure on USDJPY led the cross lower to begin. AUDJPY position unwinding added to the move before bearish comments from China’s Ministry of Commerce to the effect that domestic demand could not be expected to offset weakness in export markets led to a further drop in AUDJPY, once again dragging USDJPY and EURJPY lower. EURJPY has lost 3.5 yen so far this week and the losses seem set to continue. The pair broke strong trendline support at 136.00 last night, and this morning breezed through the next level at 135.00; technically there is not much support between here and 133.00. The apparent shift in risk sentiment is likely to see further gains for USD and JPY. Focus is on FOMC today, with a decision by the Fed not to extend the treasury buying program seen as positive EURUSD; the USDJPY side of the equation will likely be more dependent upon the outcome of the 10yr Treasury auction.