The USD and JPY maintained a firmer tone during the Asian session as risk aversion led price action. This theme looks set to continue in the European morning, with equity markets and commodities expected to experience further headwind, which will restrict appetite for the commodity bloc/emerging market currencies and carry trades generally. The pace of the pull back in the JPY crosses could be exacerbated by heavy exposure to a range of speculative positions, which weighed heavily on USD-JPY and the pair could be on course to retest the 93.50 level, where a break would reinforce calls for a move on the 90.00 level. The start of the G8 will be of interest, although the market is not expecting anything of significance to emerge for the FX market, with the dollar’s reserve status unlikely to be impacted. Meanwhile, there is growing speculation that the CFTC could set position limits for energy trading amid concerns of speculators driving the oil price higher and U.K. PM Brown has already cited the oil market in comments on the wires earlier, which could add to the heaviness in the commodity bloc currencies.