USD/JPY has added 16 pips thus far and...>

DOLLAR-YEN: USD/JPY has added 16 pips thus far and last trades at Y109.66. The

rate has moved higher in the lockstep with the Nikkei 225, which opened on the

front foot & promptly extended gains.

- Japanese data released so far has been mixed. Q3 capex topped forecasts,

company profits provided a miss, while final Jibun Bank m'fing PMI was upgraded

but remained in the sub-50 territory.

- The rate has already showed above Friday's high, which keeps bulls looking for

a firm push above Y109.93, which capped gains on May 30. Above opens the upper

1.0% 10-DMA envelope at Y110.15. On the flip side, a dip under the 200-DMA at

Y108.92 would play into the hands of bears, clearing the way to the trendline

support at Y108.77.

- The Nikkei reported that the Japanese gov't is preparing a >Y10tn fiscal

stimulus package and will discuss proposals with the ruling party next week.

- To recap, Friday saw USD/JPY driven mostly by month-end USD gyrations.

- The local data docket this week features earnings & spending figures, due

Friday. BoJ's Harada will appear on Thursday.