With next weeks Chinese New Year holiday creeping up, trade in Asia was subdued, but that didn't keep the Yen from gaining ground against both the Euro and US Dollar as risk aversion came back into the market amidst continued fears about the global banking sector. After an initial bounce in early Asian trading, the crosses as well as USD/JPY tanked as the Asian equity markets softened. USD/JPY dropped from and early high of 89.19 to levels just near 88.40 by sessions end. The crosses fell sharply in the thinned trading environment as EUR/JPY fell from 115.89 to 114.20ish, and GBP/JPY slipped from 123.80 levels to near 121.45.

EUR/USD quietly drifted lower from 130.20 session highs to 1.2930 levels as the day progressed. Later in the London session we'll have the latest PMI data which could prompt some direction. The British Pound continued its dramatic descent in Asia as concerns of the island's banks refused to subside. GBP/USD dropped from 1.3879 to just near 1.3740 ahead of GDP and Retail Sales data which will likely accelerate the drop if the data is soft.

Data in the US is nonexistent tomorrow, and keep in mind that most of Asia is out on Monday due to the Lunar New Year, the Year of the Ox.