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USD/JPY starts the week on the back......>

DOLLAR-YEN
DOLLAR-YEN: USD/JPY starts the week on the back foot with Japan coming back from
its elongated New Year's holiday. Further escalation of U.S.-Iran tensions over
the weekend supports the yen, which tops the G10 pile. USD/JPY already operates
under Friday's lows, the worst levels since mid-Oct.
- The early move lower occurs after USD/JPY lost altitude on Friday following
the killing of a top Iranian military commander by U.S. military forces.
Aggressive rhetoric from both sides kept the risk-off mood alive and well.
- Over the weekend, U.S. Pres Trump threatened with a "disproportionate"
military response if Iran retaliates, while Tehran said that it will no longer
honour its commitment to limit uranium enrichment.
- With USD/JPY trading 25 pips lower at Y107.83, bears look for a break under
the 38.2% retracement of the Aug 26 - Dec 2 rally at Y107.72. The 50%
retracement of that move at Y107.10 provides the next support level below. Bulls
need a bounce above Y108.00 before targeting the 100-DMA at Y108.22.
- In Japan, the initial focus turns to final Jibun Bank m'fing PMI, due later
today. Earnings and spending figures are due Wednesday and Friday respectively.

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