Despite broad-based USD sales, USD/JPY...>

DOLLAR-YEN: Despite broad-based USD sales, USD/JPY managed to hold above Y112.00

on Thursday, to keep the recent positive trend intact. JPY was the poorest

performer across the G10, with equities rallying sharply on both sides of the

pond pressuring the safe haven currency. The S&P500 touched an all-time high,

allowing U.S. 10-Year yields to briefly touch the highest level seen since

mid-May. This fed through to USD/JPY, dragging the cross through the September

highs, with bulls looking for a re-test of July's best levels (Y113.17).

- The JPY had little reaction to Japanese PM Abe being re-elected leader of the

ruling LDP Party, as he won a comfortable majority.

- The rate last deals at Y112.50, shaking off a stronger than expected headline

Japanese CPI release, as the BOJ's preferred inflation measure (ex-fresh food)

met expectations.

- Bears need a break back below Y111.60 to shift the outlook neutral and target

the 100-DMA & up trendline support (Y110.80-78).