USD/JPY has rallied sharply as NY Fed....>

DOLLAR-YEN: USD/JPY has rallied sharply as NY Fed said that an earlier speech by

its President Williams was academic in nature and did not refer to policy action

at the next FOMC meeting. The rate last seen at Y107.46, 17 pips better off.

- This comes after Williams' remarks, accompanied by dovish rhetoric from his

colleagues Bullard and Clarida, sent the pair tumbling on Thursday.

- Risk-off flows had already applied some modest weight in Thursday's Asia-Pac

session, but European hours brought some reprieve. 

- Sell-off emerged as dovish Fedspeak started to roll in. Bullard first argued

for an insurance cut to prevent trade war damage, but more focus fell on remarks

from Williams and Clarida. Both backed more aggressive action from the Fed.

- A later announcement from U.S. Pres Trump that the U.S. shot down an Iranian

drone triggered safe haven buying, sending the rate to intraday low of Y107.21.

- Bulls target the Y107.80-86 zone, which registered a series of lows this

month. Above opens the Y108.00 mark. Bears eye the trendline support at Y106.91.

- Japanese CPI due later today (watch the core metric). Sunday will see an upper

house election, with ruling LDP party widely expected to secure an easy victory.