Yen continues to rise on the current wave of risk aversion and extends recent rally in early US session. While Greece's sovereign rating remains the center of focus, worse than expected jobless claim report from US triggers another wave of selling in yen crosses in early US session. Mixed durable goods orders do little help to lift market sentiments. Crude oil dips below 79 level again while gold is pressing 1090 level. US stocks are also set to open lower.

Greece's fiscal problem continue to pressure European major currencies. Markets are concerned by possibility of sovereign rating down grade of Greece after warnings from S&P and Moody's. Meanwhile, there were also talks that Spain is an even larger problem giving that it's still in the deepest and longest recession in half a century, the high unemployment rate of 19%, deflating house prices, huge debts a budget deficits. While Euro remains pressured, Sterling was hit even harder on concern of more quantitative easing from BoE and the risk that UK's deficit to GDP ratio would surpass Greece's this year.

On the data front, US jobless claims rose to 496k and is edging nearer to 500k level. Durable goods rose strongly by 3.0% in January by ex-transport orders dropped -0.6%. Eurozone economic confidence dropped to 95.9 in February while consumer confidence and industrial confidence were unchanged at -13 and services confidence rose to 1. Eurozone M3 money supply grew 0.1% yoy in January. German unemployment rose less than expected by 7k in February with unemployment rate unchanged at 8.2%.

As discussed before, NZD/JPY is weakest among the commodity yen crosses. The sharp fall from 64.45 indicates that recovery from 60.45 has completed already and further fall should be seen in near term towards 59.85 cluster support (38.2% retracement of 44.19 to 69.70 at 59.95. We're slightly favoring the case that NZD/JPY has topped out in medium term at 69.70 already but will focus on mentioned 59.85/95 cluster support for confirmation.


GBP/JPY Mid-Day Outlook

Daily Pivots: (S1) 138.27; (P) 138.92; (R1) 139.50; More

GBP/JPY drops further as expected and reaches as low as 135.82 so far, just inch above mentioned target of 61.8% retracement of 118.81 to 163.05 at 135.70 next. At this point, intraday bias remains on the downside and break of 135.70 fibonacci level will target 100% projection of 150.68 to 138.23 from 143.59 at 131.14 next. On the upside, above 137.67 minor resistance will turn intraday bias neutral and bring consolidations. But recovery should be limited well below 143.59 resistance and bring fall resumption.

In the bigger picture, medium term rebound from 118.18, which is a correction to the long term down trend from 07 high of 251.90, has completed at 163.05 already. Decline from 163.05 is tentatively treated as resumption of the long term down trend from 2007 high of 251.09 and should target a new low below 118.81. On the upside, break of 143.59 resistance is needed to invalidate this view. Otherwise, outlook will remain bearish.