ForexLive Asia Wrap: USD/JPY explodes higher in pre-Tokyo trade

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A headline in late New York from the morning Nikkei news"Abe says BOJ should target unemployment" set the tone for USD/JPY strength today The Nikkei also carried: "Government to Specify 2% Inflation Target"and "Stimulus Package Seen Creating 600,000 jobs" This trifecta of headlines was ahead of the Japanese Cabinet meeting to approve the emergency stimulus package as part of the 2012 supplementary budget (Yes, 2012, the 2013 budget will carry more stimulus) Japan's Cabinet duly approved the package Abe continued to talk tough about theSenkaku/Diaoyu Islands dispute with China, while calling also for mutually beneficial strategic ties with them Data from Japan showed December Outstanding Bank Loans at +1.2% Y/Y (+1% prior) Also, Japan November Current Account Non S.A came inat -Y222.4B, vs. Prior of Y376.9B China December CPI read 2.5% Y/Y (vs. 2.3% expected), while PPI Y/Y was at -1.9% (vs. -1.8% expected) Cyclone Narelle is impacting on commodity shipping and production in Australia  Japan urges public pensions to buy foreign assets and stocks USD/JPY started its rise from 88.30 in late New York, blasting through 88.50 and then attracting continued buy interest as it rallied with no dip at all to trigger knock-outs at 89.00. A 89.03/89.88 pause ensued for an bour and then it blasted higher again to a high of89.35 in anticipation of the Japanese Cabinet meeting approving the stimulus package (it did). there was a barrage of comments from Abe and other ministersafter the approval, which served to support USD/JPY, but it did manage a retracement move to 88.80 before settling just above 89.00 for the balance of the session. EUR/USD did almost nothing today, the action was USD/JPY related; EUR/JPY gained ground but without a reaction from the EUR against the buck. AUD spent a good amount of energy attempting 1.06, but was repelled by what seems to be large barrier interestat the figure (it got as high as 1.0599). It traded down to 1.0569. NZD fell away with the AUD, dropping to straddle 0.8420 briefly.
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