Japanese yen weakens mildly in early US session as stocks rebound from Friday's selloff. DOW is back above 10000 level but after all it's still staying in recent range. Crude oil also rebounds strongly in early US session and is back trading above 81 level. Dollar, though, continue to stay in tight range against major currencies. Some short covering is seen in sterling as the pound recovers mildly after last week's late selloff. Canadian dollar is a touch weaker after BoC Governor Carney reiterated his comments that the strength in Loonie would offset recent favorable developments in the economy.

Economic calendar is rather light today. Australian PPI rose less than expected by 0.1% qoq, 0.2% yoy in Q3. There was little reactions in Aussie and market's focus will be mainly on the CPI report to be released later this week, which would have impact on the pace of rate hikes from RBA. German Gfk consumer sentiment dropped for the first time since September 2008, from 4.2 in October to 4.0 in NOvember.

Earlier today, Euro was lifted to new 2009 high Financial news, an official newspaper of the Chinese central bank, said that China should increase holdings of Euro and Yen in its reserves holdings to reflect the growing trade with EU and Japan. The article said that the government is working to maintain an appropriate size of reserves to lessen inflationary pressure and yuan appreciation and urged the country to improve yuan's exchange-rate mechanism.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 91.51; (P) 91.81; (R1) 92.34; More.

USD/JPY's strengthens mildly in early US session and is set to resume recent rebound from 88.00. But after all, since rise from 88.00 is treated as a correction to fall from 97.77 only, upside is expected to be limited by 92.52 resistance and bring fall resumption. Below 91.12 will suggest that such rebound has completed, possibly with bearish divergence conditions in 4 hours MACD. Further break of 90.07 support will confirm and bring retest of 88.00 low next. However, break of 92.52 resistance will indicate that whole fall from 97.77 has completed and stronger rebound should then be seen towards medium term trend line resistance at 95.44.

In the bigger picture, there is no change in the bearish outlook with 92.52 resistance intact. Fall from 101.43 is treated as resumption of the whole down trend from 124.13. Break of 87.12 low will confirm resumption of this down trend and should target next key level of 1995 low at 79.75. However, note that break of 92.52 resistance will firstly suggest that fall from 97.77 has completed. Additionally, this will raise the possibility that whole decline from 101.43 has finished with three waves down to 88.00 after meeting 100% projection of 101.43 to 91.73 from 97.77 at 88.07. The three wave structure will in turn indicate that rise from 87.12 is going to resume. Further break of 97.77 will target a retest of 101.43 instead.