While global stocks continue tumbling, the forex markets remain relatively steady. Some renewed buying is seen in Yen into US session but major yen crosses are stuck in range so far. Canadian dollar is also steady after solid economic data. Canadian CPI rose 0.3% mom, 1.8% yoy in April, above expectation of 0.2% mom, 1.7% yoy. Core CPI also beat expectation by rising 0.3% mom, 1.9% yoy. Retail sales rose much more than expected by 2.1% mom in March with ex-auto sales rose 1.7% mom.

Data from Eurozone saw German Ifo business climate dropped slightly from 101.6 to 101.5 in May. Eurozone PMI manufacturing dropped to 55.9 in May but services PMI rose to 56. UK public sector net borrowing was GPB 10b in April, lower than expectation of GBP 10.9b. Meanwhile total borrowing for the year through March was revised down from GPB 163.4b to GBP 156b. M4 money supply was flat in April.

Germany lower house of parliament approved the country's contribution to the EUR 750b Eurozone emergency financial fund. Lawmakers voted 319 to 73 in favor of the contribution of as much as EUR 148b.

BoJ left rates unchanged at 0.1% as widely expected. The bank also outlined a loan scheme that aims at supporting growth industrials to strengthen the foundations for economic growth. Under the scheme, BoJ will offer one year 0.1% loans to eligible banks to encourage lending to companies in industrials like health and environment.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 88.46; (P) 90.17; (R1) 91.37;

Intraday bias in USD/JPY remains on the downside with 90.92 minor resistance intact. Current fall from 93.62 is still expected to continue to retest 88.13 support next. On the upside, above 90.92 minor resistance will argue that fall form 93.62 is completed and will flip intraday bias back to the upside for this resistance.

In the bigger picture, recent volatility mixed up the overall outlook in USD/JPY and we'd stay neutral first. On the downside, break of 88.13 support will indicate that rise from 84.81 has completed at 94.97 already. The three wave corrective structure will in turn indicate that down trend from 124.13 is not completed yet and would bring another fall to 84.81 and below. On the upside, though, break of 94.97 will reaffirm the case that 84.81 is already the long term bottom and will target 101.43/65 medium term resistance zone for confirming this bullish case

Economic Indicators Update

GMT Ccy Events Actual Consensus Previous Revised 03:40 JPY BoJ Interest Rate Decision 0.10% 0.10% 0.10% 06:00 EUR German GDPQ/Q Q1 F 0.20% 0.20% 0.20% 07:30 EUR German PMI Services May A 53.7 55.4 55.2 07:30 EUR German PMI Manufacturing May A 58.3 61.1 61.5 08:00 EUR German IFO - Expectations May 103.7 103.5 104 08:00 EUR German IFO - Business Climate May 101.5 101.9 101.6 08:00 EUR German IFO - Current Assessment May 99.4 100 99.3 08:00 EUR Eurozone PMI Services May A 56 55.6 55.6 08:00 EUR Eurozone PMI Manufacturing May A 55.9 57.4 57.6 08:00 EUR Eurozone Current Account (EUR) Mar 1.7B -2.7B -3.9B -4.5B 08:30 GBP Major Banks Mortgage Approvals Apr 47K 53K 52K 51K 08:30 GBP Public Sector Net Borrowing (GBP) Apr 10B 10.9B 23.5B 18B 08:30 GBP M4 Money Supply M/M Apr P 0.00% 0.30% 0.20% 0.10% 08:30 GBP M4 Money Supply Y/Y Apr P 3.30% 3.80% 3.60% 3.50% 11:00 CAD CPI M/M Apr 0.30% 0.20% 0.00% 11:00 CAD CPI Y/Y Apr 1.80% 1.70% 1.40% 11:00 CAD BoC CPI Core M/M Apr 0.30% 0.20% -0.20% 11:00 CAD BoC CPI Core Y/Y Apr 1.90% 1.80% 1.70% 12:30 CAD Retail Sales M/M Mar 2.10% 0.00% 0.50% 12:30 CAD Retail Sales Less Autos M/M Mar 1.70% 0.40% -0.10%