JPY on top as equity recovery proves..........>

FOREX: JPY on top as equity recovery proves short-lived

-Despite the late-in-the-day rally in US equity markets Thursday and the

spillover into Europe Friday (mainland European indices traded higher by over

1%), the JPY outperformed for the entirety of the session. USD/JPY extended

losses through the 200-dma to re-target recent lows of Y110.00, which becomes

the first target for bears heading into the new year.

-News, volume and liquidity remained thin for much of the day, with the German

CPI the main datapoint out of Europe, which ebbed below expectations, hurting

the EUR somewhat: 0.1% m/m vs. Exp.  0.3%. This seemed to prevent EUR/USD from

adding to any gains above 1.1450.

-In the US, government shutdown woes continue to grab the headlines, helping

press the USD index into negative territory at the NY crossover. A

better-than-expected MNI Chicago PMI release wasn't enough to underpin the

greenback in the final full trading session of the year.

-Data is few and far between on Dec31, with most markets opening for half the

session.