The Japanese yen strengthened after the Democratic Party of Japan won the national election over the weekend.

  • The historic victory by the DPJ ends almost half a century ruling from a single-party government over Japan.  The winning party has pledged to revive an economy emerging from its deepest recession by boosting child-care spending, cutting taxes and limiting the power of bureaucrats.
  • The yen appreciated to 132.17 versus the euro in Tokyo from 135 in New York and against the greenback to 92.54 from 94.07 high on Friday.  The yen also strengthened amid speculation Japanese exporters purchased the nation's currency because of month-end demand.
  • The ECB rate announcement and press conference are due this Thursday and according to analysts the central bank will keep its main refinancing rate at 1%.
  • The G20 finance ministers are scheduled to meet this coming Friday and Saturday, ahead of the G20 summit on September 24-25.  The UK markets will be closed today for a bank holiday.

Currency to watch out for: EURJPY & USDCAD

  • The EURJPY pivot point is at 133.00 with a preference to enter into short positions at 132.93
  • The USDCAD pivot point is at 1.0875 with a preference to enter into long positions above 1.0875

Today's calendar and market movers:

  • EU CPI Flash Estimate year on year expected to rise to -0.3%
  • Canada GDP month on month expected to rise to 0.2%
  • Chicago PMI expected to rise to 47.8
  • Reserve Bank of Australia interest rate for overnight money market deposits is due to remain unchanged at 3.0%

Now onto Stocks:

  • The US equities ended the week on Friday mixed with the Dow lower by 0.4%, the S&P lower by 0.2% and the NASDAQ up 0.05%.  However for the week, the three major indexes posted small gains between 0.3% and 0.4%.
  • As of 06:05 GMT the Nikkei is trading at -0.4% and the Hang Seng -1.8%