Archived IMT (2010.08.30)

The BOJ OPTED FOR easing than actual FX intervention, via expanding its 6-month fixed rate lending facility to 30 trln yen from 20 trln yen. The yen rose as a result of the confirmed absence of intervention. See previous IMT explaining why I continue to see no yen-selling intervention. Yen gained further ground when US markets took a turn to the worse despite better than expected 0.4% increase in July consumer spending. This may be a week where many US and European players are away on holiday, the concentration of US economics reports (ADP, ISMs, NFP/Unemp) could provide the data equivalent to the Feds economic downgrade. With S&P500 currently trading at 1056, it seems inevitable that we will see a retest of the key 1040 support, through which could lead USDCAD and AUDJPY towards 1.0630s and 75.00. Also watch tomorrows US Aug consumer confidence index, which risks falling below the 50 level.