[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]  Japanese Forex Trading Preview  January 22, 7:00 PM: EUR/$..0.8881 $/JPY..133.68 GBP/$..1.4398 $/CHF..1.6592  Japanese Forex Trading Preview  by Darko Pavlovic  At 6:50:00 PM Japan Nov All industries index (exp -0.2%, prev -0.5%) Japan Nov all tertiary index (exp 0.5%, prev -0.4%)  USD/JPY is trading around 133.70, eased by nearly two-third yen from a fresh 3-year high of 134.47 due to profit taking on the dollar's sharp gains. Many analysts interpreted the US endorsed a weak yen after the Treasury Secretary O'Neill's comments overnight that markets should determine currency exchange rates. Nonetheless, O'Neill emphasized that manipulating FX rates would not solve Japan's economic difficulties. In addition, O'Neill reaffirmed that the US was committed to its "strong dollar" policy, although the US is only likely to support weakness in the yen in hand with the writing-off of bad loans, acceleration of structural reforms and market deregulation. O'Neill will have a chance to further expand his views on Japan's economy and forex levels after he meet with the BoJ Governor Hayami who is a vocal opponent of weak yen policy. US Treasury Secretary will give a press conference around 1 AM EST. PM Koizumi said that Japan's banks are not in need a new round of public fund injections at the moment, but the government is wary if it becomes necessary.  If, in the future, there is a risk that great harm will fall upon the financial system, we will take flexible measures," Koizumi said. Finance Minister Shiokawa said to his US counterpart that the Japanese government will urge the BoJ to provide more liquidity to the market as part of efforts to overcome deflation. During a 40-minute meeting with O'Neill, Shiokawa stressed the Japanese government's determination to bring deflation under control. According to BoJ branch managers for Osaka, Nagoya, Sapporo and Fukuoka corporate sentiment is worsening further and production continues to decline. Some branch managers warned of the growing divide among companies in areas such as corporate earnings. Japanese Nov all industries activity rose 0.4% from the previous month. The tertiary sector index rose 1.7% in November from the previous month. Support is seen at 133.60, backed by 133.0 and 132.60. Upside capped at 135.0 and 135.50  EUR/USD is trading around 88.80 as the EUR/JPY rose to a session high of 118.70 after more bad data from Japan confirmed the weakness in the second largest economy. The euro was upon the release of the largest rise in the US Index of Leading indicators in 6 years. In spite of the greenback's initial strong performance, the euro and Swiss franc had recovered by the end of US trading, while the pound and yen stemmed their losses as falling stocks weighed on the dollar. Also giving the single currency a boost was ECB Welteke's conviction that Eurozone inflation will fall below 2% in spring. However, Welteke foresaw a possible rise in January Eurozone prices, though the inflation downtrend is intact. In spite of his slight pessimism, many market players were cheered by the possibility that the European Central Bank will lower rates once inflation breaks below the bank's 2% target. Resistance is seen at 89.10-- the 50% Fibonacci retracement of the same move, and 89.55. Support is viewed at 88.10, 87.70 and 87.50-- the 31.8% Fibonacci retracement of the move from 82.25 to 95.96.   The major event of this week will be Fed Chairman Greenspan's testimony before the Senate Budget Committee on Thursday since markets are anxious to hear his remarks on the economy and any clues they might glean about the central bank's monetary policy. In particular, economists believe that Greenspan's testimony may also be supportive to the dollar following a report in the Washington post that according to Fed sources, Greenspan "sounded more pessimistic than intended about the prospects for U.S. economic recovery" in his January 11 speech. This was confirmed today by Dallas Fed President McTeer who said that Greenspan's speech on January 11 was not quite as negative as some thought. McTeer also pointed out that the US economy is looking much better than it was 2 months ago. According to the sources, the Fed Chairman is likely to comment more positively about the current state of the US economy on Thursday, and therefore markets are now pricing in less than a 30% chance of a rate cut at the Jan 30 meeting, leaving the majority to believe rates will be held steady at a 40-year low of 1.75%.  This week's key US indicators include jobless claims and existing home sales. Fed Chairman Greenspan's testimony before the Senate Budget Committee will be the major event of the week, with markets cautious to hear his remarks on the economy. From the Eurozone, major data due for release consist of Euroarea labor costs, German CPI, Italy's ISAE consumer confidence survey, ECB monthly bulletin, German PPI, Italian CPI, Italy's ISAE industrial confidence survey, Italian retail sales and Spanish PPI. Economic highlights from Japan comprise the trade balance, index of tertiary sector activity, corporate service prices and consumer prices.     	[IMAGE] Audio Mkt. 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