ForexLive Asia Wrap for Tuesday 08 Jan 2013: Japan to buy ESM Bonds with FX Reserves

The move of EUR/USD from 1.3110 to 1.3140, and USD/JPY from 87.43 to 87.83, in the blink of an eye ... well, that was the Japanese Finance Minister Taro Aso saying Japan will buy bonds issued by the euro zone's ESM bailout fund. EUR/JPY, too, gapped up, from 114.60 to 115.25.

Up until then the Yen had been gaining ground during the day, with USD/JPY as low as 87.23 in the morning, finding resistance on the bounce ahead of 87.60. After the 'ESM bond' news the USD/JPY gradually lost ground again, around 87.45 as of the writing of this wrap.
EUR/USD had a quiet morning, with a battle between buyers and sellers confining it to a narrow band around 1.3120 before it drifted lower to just under 1.3110. Post 'ESM bond' news it went quiet again, back down to 1.3120/30 range.
AUD lost ground during the session , to a low of 1.0476. NZD traded lower with it, to 0.8353. Cable performed strongly on the session, as high as 1.6129 before back down to 1.6100.

Other news/data for the day:

WSJ article: Japan Executives Urge Caution on Yen
Australia data: AIG Performance of Construction Index 38.8 (vs. 37.0 in November)
Australia November Trade Balance Goods & Services -$A2.637Bn (vs. -$A2.3Bn expected)
Japan releases draft on emergency economic stimulus measures