A day of consolidation wouldn't have been a black mark for the US dollar but it shrugged off earlier losses and rallied in New York trading. On the day, the kiwi and Swissy were the top performers while the yen lagged. Japanese retail sales and Australian capex numbers are due later.
USD/JPY stormed ahead once again on Wednesday before it finally ran into resistance. The late-day high was 124.07, just shy of the 2007 top at 124.14. A break above that would be the best level for the pair since 2002.
Initially at least, that level proved to be solid resistance and some profit-taking pushed the pair back to 123.69. At such a critical long-term level, unless there is a resounding rejection in the next day or two, it points to a break. One space to watch closely is the G7 finance ministers meeting in Germany. If Japanese leaders signal that they don't want further yen weakness, the trade could turn around.