The Japanese Yen continued to weaken against every major currency except for the Swissie despite stronger Japanese economic data.
Small business confidence increased from 47.4 to 49.1 and BoJ member Suda also attempted to calm the markets by saying that subprime woes have receded slightly. Tonight is a big night in Japan with a lot of economic data due for release. This includes the jobless rate, overall household spending, consumer prices, industrial production and retail sales. Most of these releases are expected to be weaker, reinforcing the factors driving the current recovery in the Yen crosses. The Dow wants to test 14k and if it does, the Yen crosses will continue higher as well.
Written by Kathy Lien, Chief Currency Strategist of DailyFX.com