[IMAGE] Forums Discuss these points in the Forums:  Forexnews Forum       Technicals Live Charts Analysis available from: Cornelius Luca   J.P. Chorek   Technical Research Ltd.   Charts & News featuring Standard & Poor's       Interest Rates   US: Japan: Eurozone: UK: Switzerland:   1.75%  0.15%  3.25%  4.0%  1.25-2.25%       [IMAGE] 	 [IMAGE]  JPY Soars To Spectacular Heights On Speculative Flows  March 7, 7:00 AM: EUR/$..0.8763 $/JPY..128.82 GBP/$..1.4203 $/CHF..1.6803  JPY Soars To Spectacular Heights On Speculative Flows by Jes Black  At 7:00 AM BoE MPC meeting (exp 4.0%, prev 4.0%) At 7:45 AM ECB meeting (exp 3.25%, prev 3.25%) At 8:30:00 AM US Q4 Unit Labor Costs rev (exp -1.4%, prev -1.1%) US Q4 Productivity Rev (exp 3.9%, prev 3.5%) US Jobless Claims (exp 370k, prev 378k) At 3:00:00 PM US Jan Consumer Credit  (exp -3.1 bln, prev -5.1 bln) At 10:00 AM Fed Chairman Greenspan speech before Senate Banking Committee.   The dollar recovered from sharp losses against the European majors in London trade but extended its slide against the yen on Thursday as speculators who had been on the sidelines poured in to go long the yen. Japan's Nikkei also continued its climb and the government's resolve to boost Japanese assets ahead of March 31 is likely to fend off any negative news that comes its way. JPY added to its weeklong gains exploding through key options positions to hit 10-week highs of 128.68 and 112.87 against the dollar and euro.  JPY has recovered sharply from its last test of 135 resistance vs USD, rising over 4% in the past 7 trading days and the dollar is now threatening chart support at 127.75, which marks the 38.2% retracement of the 115.75-135.15 move. This should provide a solid base for a corrective rally in USD/JPY but supporting the yen were signs that US fund managers would increase their exposure to Japan just as government officials have created an artificial floor under share prices through stricter short selling laws. Combined with repatriation fears ahead of March 31 further yen gains cannot be ruled out. Support seen at 128.60, 128.00 and 127.75. Resistance is eyed at 130.50, 130.90, and 131.50.  There was little buzz ahead of today's two monetary policy meetings from the Eurozone and UK as both are expected to keep rates unchanged at 3.25% and 4.0% amid signs that the economic malaise is over.   Today's better-than-expected 0.1% rise in Swiss GDP avoided expectations of recession and points to signs the Swiss economy may also be past the worst, making it less likely the central bank will pare interest rates for a fifth time in a year when policy makers meet on March 21. The Swiss Purchasing Managers' index on industrial activity in February rose last week to an eight-month high, and the KOF institute's leading economic indicators gained for the first time in almost two years in January. USD/CHF maintained around 1.68 after a brief fall to 1.6735.  With increased confidence, German Fin Min Eichel said today that economic growth in the euro zone could reach a rate of 3% by the end of 2002. Eichel's comments come ahead of today's ECB meeting at 7:45 AM, where the market expects no rate change due to improving conditions. A jump in Germany's Ifo business climate index to a six-month high, improved purchasing managers' surveys and other indicators all back the ECB's view that the economy should regain momentum later in the year.  Sterling is also trading steady ahead of today's Bank of England monetary policy committee meeting. The majority of economists believe that the BoE will keep rates steady at 4.0%, particularly after the central bank governor Eddie George made comments with the intent of dampening market hopes for interest rate hikes later in the year.  Sharp USD/JPY losses on Thursday added fuel to the euro's fire as it climbed to new highs of 61.70 pence and 88.13 cents. But a subsequent plunge in EUR/JPY to a new 3-month low of 112.65 wiped out most of the euro's sharp gains against the dollar and sent it back to support around a day's low of 87.55. Maintaining above this level will be key for the euro in order to take out 88.10 cents which is the 50% retracement of this year's move 90.63 to 85.63. From there, the euro faces its next resistance at 88.50. Support is viewed at 87.0, backed by 86.65 and 86.30.  GBP/USD broke through tough resistance at 1.4245 and hit a new high of 1.4313 despite added gains in EUR/GBP from trendline support at 61.15 to a new high of 61.70 which has kept sterling under pressure. But sterling gave back most of those gains and fell to a day's low of 1.4220. Therefore, resistance is still eyed at 1.4240/50, 1.4280 and 1.430. Support holds at 1.4180 and 1.4130.  Despite a falling dollar, stock markets powered higher this week amid increasing confidence in an economic recovery after being held back by Enronitis for the last couple months. But growing confidence in a simultaneous global recovery has sent some investors overseas in search of higher returns given the high prices of US equities. This has put European and Japanese assets in demand and is sapping strength from the capital inflow dependant dollar.   Today's data is expected to confirm upbeat projections and key US productivity data should be revised higher in line with the recent upward revision in GDP Q4. Likewise, chain store sales growth is expected to be strong again in February, indicating continued consumer resilience.  Fed Chairman Greenspan is also due to testify before the US Senate Banking committee at 10:00 AM. Today's speech by Greenspan on monetary policy is not likely to deviate from last week's guarded optimism, but given the recent spate of data, Greenspan may sound more upbeat.  Friday's key US labor market report will also keep dollar bulls anxiously awaiting further signs of recovery which may pull the greenback out of rangebound trading. But the dollar's recent failure to benefit from strong data and Wall Street's gains has left dollar bulls feeling uncertain.  	[IMAGE] Audio Mkt. Analysis USD/JPY Hits 2-month Low       Articles & Ideas  Will Dollar be Fuelled against the Euro?   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