Sharp Intraday Recovery Seen in Yen Crosses

The stronger than expected Japanese Merchandise Trade balance has helped rally the Yen, but the late US stock market recovery caused a massive reversal in all of the Yen crosses.

In fact, some of the pairs such as USD/JPY are back in positive territory. Consumer prices are due out tomorrow night. Any evidence of inflationary pressures could to a new wave of Yen strength. Otherwise, the other big focus is the upcoming LDP elections. If the LDP loses its majority, the Yen could weaken because future reforms would be difficult to be passed.