USD/JPY at 4-month Highs, Europe Losing Patience With Greece

Europe continues to press its foot against Greeces throat, demanding more before releasing bailout funds. The Canadian dollar was the top performer Tuesday while the yen lagged. Asia trading has been quiet but USD/JPY continues to rise. Markets await UK Jan unemployment and Eurozone Q4 GDP.

AT9:30 GMT, UK Jan claimant count unemployment is expected at 3.0K from 1.2K. Dec ILO unemployment seen at 8.5% from 8.4%.

Dec average weekly earnings expected +1.8% m/m from prior +1.9%.

At 10 am GMT, Eurozone Dec flash Q4 GDP expected at -0.3% q/q, (+0.7% y/y) from previous +0.2% q/q (+1.4% y/y).

The Bank of England presents its quarterly inflation report at 10:30 GMT. This follows yesterdays fast drop in inflation. Here is Ashrafs take on charting UK inflation vs GBPUSD. http://ashraflaidi.com/hot-chart/?a=3117

Traders were hoping the Eurogroup would approve the Greek bailout at a meeting on Wednesday but Juncker called off the meeting as Greece failed to meet a number of conditions. Those were an additional 325B euros in spending cuts and commitments from party leaders to uphold the austerity agreement after the elections.

Those concerns knocked EUR/USD below 1.31 but it later rebounded to 1.3120 after Greek officials said they met those conditions. New Democracy leader Samaras was reportedly holding out on signing the austerity pledge but officials said he would deliver a letter of support on Wednesday.

In any case, the Eurogroup in-person meeting was cancelled and a conference call was scheduled instead. The FT is reporting that approval for the bailout funds may not come until March 2, suggesting two more weeks of uncertainty.

The FT also reported that several northern European nations have lost patience with Greece. The recent developments are making it more difficult for bondholders to participate in the PSI swap, which could begin as soon as Friday.

Asian trading has been light so far with no major data on the schedule. Australias consumer confidence index from Westpac improved 4.2% to 101.2. Market participants are closely watching to see how Japan responds to the strong close in USD/JPY and technical momentum in the pair. If there is no significant selling interest, the pair could run higher in Europe and the US.