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[IMAGE] Forums Discuss these points in the Forums: Forexnews Forum T= echnicals Live Charts Analysis available from: Cornelius Luca J.P. Chorek= Technical Research Ltd. Charts & News featuring Standard & Poor's = Interest Rates US: Japan: Eurozone: UK: Switzerland: 1.75% 0.15% 3.= 25% 4.0% 1.25-2.25% [IMAGE] =09 [IMAGE] JPY Gains on Nikkei Advanc= e, USD Firm vs European FX March 4, 7:00 AM: EUR/$..0.8635 $/JPY..132.25 G= BP/$..1.4164 $/CHF..1.7108 JPY Gains on Nikkei Advance, USD Firm vs Europe= an FX by Jes Black No Key Data. The yen soared Monday morning on the bac= k of a 5.9% rise in the Nikkei to a 6-month high of 11,450. The rally caugh= t many investors by surprise and added to Friday's corrective gains in JPY.= The Bank of Japan also said that it flooded Japan's monetary base by 27.5%= y/y in February, the largest rise since the oil crisis of 1974. While this= move was welcomed by the stock market, traditional economics teaches that = is a negative for the yen. But, in the run up to March 31 fiscal year-end, = the government's attempts to sustain a floor under Japanese share prices wi= ll have a restrictive effect on foreigners selling of Japanese shares over = the coming weeks. Last week saw another strong sell off in USD/JPY after = being rejected around 135.00. USD/JPY broke trendline support around 133.50= on Thursday and has yet to recover. Now, a break of key support at 132.00/= 131.80 seen as bearish implication for the pair and would open up a downsid= e target of 130.45. But downward momentum is expected to bottom today, whic= h could lend support to the pair above the key 132.00/131.80 area. Upside c= apped at 133.0, 133.50 and 133.70, 134.00/10, 134.70/85 and strong resistan= ce at 135.15. Support holds at 132.20 and 131.80. Adding to yen strength w= as this weekend's failure of construction contractor, Sato Kogyo, which has= been taken as a positive sign that non-performing loans are at last starti= ng to be tackled. But, today's rally was mostly the result of the governmen= t's short-sighted policy to reduce stock market manipulation and urge domes= tic pension funds to buy along with adding funds to the stock buy-back sche= me. This, the government hopes, will avoid a financial crisis ahead of fis= cal year end. If it keeps the Nikkei at or above 10,000, it would avoid the= need for an infusion of taxpayers' money to help rid banks of non-performi= ng loans. The government dislikes the idea of another public injection, as = it would amount to an admonition of failure and be politically unappealing.= But putting an artificial floor under Japanese share prices is likely to p= rove short-lived as dealers expect any gains to give way to a new wave of s= elling in the new fiscal year in April, which would lead back to yen weakne= ss. Moreover, with repatriation poised to slow near the end of March and n= et outward investment to resume thereafter dealers expect to see further ye= n weakness in the weeks to come allowing USD/JPY to target 140 once the 135= .00/20 major resistance band is broken. EUR/USD was unchanged after a bet= ter than expected rise in consumer confidence data which the European Commi= ssion said confirmed its forecast that the economic recovery in the Eurozon= e would begin in the first quarter of 2002. But the slight increase in cons= umer confidence to minus 9 from minus 11 only translated into a meager 0.2 = rise in the overall economic sentiment survey to 99.2 in February from 99.0= . Weighing on the whole was business sentiment which did not change at minu= s 14, disappointing the consensus estimate of an improvement to minus 11.9.= EUR/USD gave up earlier gains and fell back towards last week's 3-week lo= w of 86.25. Traders were not encouraged by Eurozone prospects and sentiment= is again turning bearish enough to target a move through 86.30/15 on its w= ay to its 6-month low of 85.63. Support is seen at 86.30, 86.15, and 85.60.= Resistance is viewed at 86.60, 87.10, and 87.85. Meanwhile, the focus thi= s week will be the BoE and ECB which both meet on Thursday this week. Stron= ger than expected E12 PMI data last week and a further gain in consumer con= fidence are likely to reinforce the ECB's resolve to keeps rates unchanged = this week. The BoE is also likely to keep rates unchanged after UK Februar= y manufacturing PMI rose unexpectedly above the 50-mark last Friday indicat= ing manufacturing has recovered from yearlong contraction. However, sterlin= g is likely to remain weakened by EMU expectations, and because of the fact= that BoE Governor George again tried to talk down the sterling strength. M= oreover, the strong performance of US stocks on Friday is likely to underpi= n USD as investors switch back into risk seeking mode. European majors shou= ld suffer from this shift as the Swiss franc loses its safe haven luster an= d sterling loses investors seeking safety in the FTSE. GBP/USD tried to = add to Friday's recovery from a 3-week low of 1.4110 but only reached a hig= h of 1.4218, lower than Friday's high of 1.4230. Cable subsequently fell ba= ck to a day's low of 1.4159, just above support seen at 1.4150. Resistance = eyed at 1.4180 and 1.4230. A break of 1.4110 would put 1.4045 under pressur= e and be seen as a bearish signal. =09[IMAGE] Audio Mkt. Analysis European= FX Drop After ISM Articles & Ideas Euro: The Lonely Tender JPY: K= oizumi Fails To Deliver Articles & Ideas Forex Glossary Economic In= dicators Forex Guides Link Library [IMAGE] =09 =09=09[IMAGE][IMAGE] [IMAGE][IMAGE]=09 =09=09 This e-mail is never sent unsolicited. If you wish to unsubscribe f= rom this or any other Forexnews.com newsletters, please click here . Any = opinions expressed by representatives of Forexnews.com or its affiliates as= to the commentary, market information, and future direction of prices of s= pecific currencies reflect the views of the individual analyst, and do not = necessarily represent the views of Forexnews.com or its affiliates in any w= ay. In no event shall Forexnews.com or its affiliates have any liability fo= r any losses incurred in connection with any decision made, action or inact= ion taken by any party in reliance upon the information provided in this ma= terial; or in any delays, inaccuracies, errors in, or omissions of informat= ion. =09
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