Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

European morning wrap: Yen sees some strength ahead of BOJ decision

|Includes: CurrencyShares Euro Trust ETF (FXE), FXY
  • Dutch FinMin De Jager: Has had "constructive" talks with a number of opposition parties about 2013 budget - Dutch TV
  • Euro zone economic sentiment falls to 92.8 in April, weaker than Reuter's median forecast of 94.2
  • BOE's Weale: Arguement to extend QE stronger now after GDP data
  • Italy April business confidence falls to 89.5 from revised 91.1 in March (prev 92.1), weaker than Reuter's median forecast of 92.1. Lowest read since October 2009
  • UK mortgage approval for home purchase 31,888 in March, down from 32,840 in February and lowest since April 2011. On the otherhand, net mortgage lending +904 mln in March, up from +659 mln in February and highest since July 2011
  • UK CBI retail sales balance -6 in April, down from 0 in march and weaker than Reuter's median forecast of -4
  • Japan National Strategy Minister Furukawa: Doesn't want to see extreme yen moves
  • BOJ failure to ease tomorrow would be disaster, Mizuno says - Bloomberg

Not alot of change when all said and done, the main feature probably some strenghtening of the yen. That said it hasn't been dull, with enough volatility to keep market participants on their toes.

USD/JPY (NYSEARCA:FXY) down at 80.85 from early 81.10 having been as low as 80.78. Move comes with market in mild risk off mode, European stocks lower and US treasury yields lower.

Obviously lack of policy change by BOJ tomorrow would leave yen bears exposed. Talk of sell stops in USD/JPY now through 80.75.

EUR/USD (NYSEARCA:FXE) slightly lower at 1.3210 from early 1.3225. We rallied hard initially taking out barrier option interest at 1.3250 on way to session high 1.3263. BIS duly stepped in selling triggering a smart about turn.

The release of weaker than expected euro zone economic sentiment (see above) accelerated the decline.

Light sell stops now seen through 1.3200 and more notable through 1.3175.

Cable effectively unchanged at 1.6175. We rallied early and after some hesitation took out 1.6200 barrier option interest. Little follow through as we topped out at 1.6207 and slipped back below 1.6200.

Comments from BOE's Weale on the BBC (see above) hit the wires in late morning trading sending cable back to where it started.