USDJPY has fallen back through its 55-DMA to....>

YEN: USDJPY has fallen back through its 55-DMA to trade at 110.60, with the

200-DMA at 109.91 the next level of support. The pair has recoupled with US Tsy

yields and US stocks.

- Further losses look likely from a fundamental perspective as Japanese real

yields continue to close their gap with the US thanks largely to diverging

inflation expectations, suggesting that the yen firmly retains its safe haven

status. Any continued drop in US stocks, which are finally showing some signs of

weakness, should translate into USDJPY declines. 

- Trade data and foreign asset purchases will be released in 10 mins.