*Last Updated February 8, 2006, 12:03 am

Daily report by CMC Markets

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FOREX ANALYSIS

USD JPY remains volatile as Bank of Japan meet on monetary policy

February 8th - USD JPY has continued on a rather turbulent path through the Asian session with little consensus emerging as to future direction for the currency pair. This theme may well continue until the current Bank of Japan’s policy board meeting is concluded but suggestions are that there’s little reason to believe that interest rates will start rising in Tokyo just yet, it’s more a case of traders booking profits after the relatively large swings that we’ve seen in recent weeks. In the coming days we’ve got the Japanese CGPI reading, plus import and export price index data due – again any of these numbers could hold some clue as to where interest rates will go next and there’s little doubt that Yen yields will improve this year, it’s more a case of trying to decide precisely when it will happen. Today’s oil inventory from the US could also prove somewhat interesting – crude prices are falling on expectations that strong reserves will be reported and this is news that could prove to be well received by the Japanese manufacturing sector, in turn further supporting the country’s economy.

Wayne Roworth and Enis Mehmet



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