[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 21, 7:00 PM: EUR/$..0.8829 $/JPY..132.84 GBP/$..1.4351 $/CHF..1.6615  Japanese Forex Trading Preview by Darko Pavlovic  No key data.  In thin trading due to US holiday, market focus is shifting to a meeting between the US Treasury Secretary O'Neill and Japanese Finance Minister Shiokawa scheduled at 7:15 pm EST. Although traders do not expect the forex to be the main topic of the conversation, some think that O'Neill might say something to approve the present government policy over weak yen. In yesterday's trading the BoJ published the minutes of their November 29 meeting, showing members voted 8-1 to ease monetary policy. Moreover, a Japan MoF official urged debate on BoJ buying of foreign bonds as a way to weaken the yen. Given BoJ Governor Hayami's increasing concern with deflation, it is likely that the central bank could soon increase the money supply, allowing the yen to depreciate further. The number of Japanese corporate bankruptcies in 2001 was the second highest since the 1945 while total liabilities fell 30.8% from the record high in 2000. The number of corporate failures last year jumped sharply after Mycal went bust and business sentiment deteriorated in the wake of the terrorist attacks on the U.S. in September Japan's Financial System Minister Yanagisawa stressed PM's Koizumi's determination to take every possible measure to avoid volatility in the financial system during a Monday meeting with U.S. Treasury Secretary Paul O'Neill. During the meeting, Yanagisawa told O'Neill that Japan now has a secure safety net, after going through the 1998 financial crisis. Yanagisawa also referred to a system that allows the government to inject up to 15 trillion yen worth of public funds in case of a financial crisis. Concerning the issue of bad-debt disposals, Yanagisawa told O'Neill that the Japanese government aims to take final steps to separate bad loans from banks' assets in two to three years. Moody's announced Monday it has changed the rating outlook for 10 major Japanese banks from stable to negative, due to concerns over probable negative effects of the planned April abolition of the government's full guarantee on deposits at failed lenders. Finance Minister Shiokawa said Monday the government plans to avoid a deflationary spiral with a second supplementary budget for fiscal 2001, which is also aimed at speeding up the economic structural reform initiatives of PM Koizumi. In December the government compiled a package of economic programs worth 4.1 trillion yen ''to accelerate economic structural reform and avoid the economy's deterioration with increasing speed along with continuing deflation . Support is seen at 132.0, 131.80 and 131.60. Resistance is eyed at 133.0 and 133.35.  EUR/USD is trading around 88.30 weighed by the third straight fall in Eurozone industrial production to -0.8% m/m in November from the previous -0.4%, or to -4.3% y/y vs. the previous -2.7% in its largest annual decline since July 1993. The data bodes poorly for Q4 GDP figures, and thus centers markets' focus on the European Central Bank. German FinMin Eichel said that German budgetary deficit policy did not face any criticism on Monday's euro group meeting. Eurogroup's Rato believed the ECB thought economic downturn scenario not too worrying. Rato added that appropriate policies have been adopted to help recovery. EU's Solbes said euro zone structural deficits would improve in 2002 and 2003 while the euro zone CPI is likely to fall under 2% in Q1. Although the Bundesbank's Welteke reiterated the ECB's insistence on keeping monetary policy unchanged, many analysts believe the ECB will lower rates by 50-basis points over the next few months now that inflation has fallen to the 2% target rate. In addition, all ears will be tuned in to European Central Bank President Duisenberg's testimony on Wednesday before the EU's Economic and Monetary Affairs Committee for any hints about future interest rate cuts and the Eurozone economic outlook. Resistance is seen at 88.80, 89.50 and 90.0. Support is viewed at 88.0, 87.50 and 87.0.  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". According to the sources, the Fed Chairman is likely to comment more positively about the current state of the US economy, 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 other 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 foreign trade, HICP, French CPI, Italian industrial orders, 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. Analysis Quiet Market Awaits Data, USD Talk        Articles & Ideas  Philly Fed-Supported Optimism   EUR/USD: Technical Analysis       Articles & Ideas Forex Glossary   Economic Indicators   Forex Guides   Link Library      [IMAGE]  	
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