G-20 Meeting Did Not Emphasize Yen’s Weakness

The dollar was little changed against most major currencies on Monday. The EUR/JPY and the USD/JPY rose after a weekend G-20 finance ministers meeting yielded few comments on the yen's recent weakness and speculation the Japanese government is about to lower its forecasts for Japan’s economic growth.

• The euro advanced after European Central Bank President Jean-Claude Trichet said the ECB had to be strongly vigilant on inflation risks, fueling speculation the ECB will hike rates another 25 basis points. Few important economic data are released this week and it is a Thanksgiving holiday on Thursday, so we expect technical trading to dominate the FX market this week. The dollar is at important support around the 84-85 area as illustrated in the chart below. If the support was broken, the dollar would decline further. However, we believe the support will hold.