Asia FX Summary: USD/JPY Capped Ahead of 98.00; Retreats on Chrysler Bankruptcy News

The dollar mainly consolidated losses in Asian trading with key currencies such as AUD-USD and EUR-USD stalling ahead of the highs already made in NY trading. AUD was limited to 0.7291 after a high of 0.7299 in NY due to option defense while EUR-USD was limited to 1.338 after a high of 1.3341 in NY. Similarly, USD-JPY attempts to rally stalled at 97.85, falling short of the high of 97.99 in NY dealings. Traders reported some early JPY cross buying into the Tokyo fix, both on purported large demand but also in response to a surge in the Nikkei in early trading. But, the market became long JPY crosses, and the WSJ report that Chrysler was close to filing Chapter 11 prompted a round of profit-taking, sending USD-JPY to 97.15 and prompting EUR-JPY profit-taking with EUR-USD dropping back to 1.3275 as a result. The BOJ left rates unchanged at 0.10% as expected. The 50 bp rate cut by the RBNZ saw the Kiwi fall from 0.5735 to lows of 0.5634, with subsequent consolidation around 0.5633-0.5676 into the afternoon. Asian stocks were all broadly higher on the back of the DJIA gains and with oil rising above $51 and copper strongly higher on the optimistic economic outlook.