USDJPY has so far failed to build........>

DOLLAR-YEN: USDJPY has so far failed to build above Y107.00, putting the focus

back on the Asia/Europe low at Y106.78. The 76.4% retracement of the Jan-Apr

rally comes in at Y106.65, ahead of the bear channel base drawn off the Apr 24

high at Y106.28. Any further moves through Y106 could see the Japanese Finance

Ministry become more vocal on the currency rate. JPY continues to register

modest gains across G10 (except NZD & SEK) in early NY.

- A reminder of the large Y107.25($960mln) option expiry for today's NY cut.

Heavier expiries due up in the coming days as we approach

month/quarter/half-year end.

- CitiFX Quant has published its preliminary month-end FX hedge rebalancing

model which suggests significant selling of USD this Friday.

- Barclays also expect the Fed's pre-emptive cuts to temporarily weigh on the

USD, especially vs. G10 currencies, as the US rates advantage compresses amid an

environment of slowing global growth.

- US data highlights today from Richmond Fed, New Home Sales & Consumer

Confidence.