Yen Ends Week With Strong Gains

JPN - GDP Growth Revised Downward

We begin with a report from Japan, where growth in the economy was revised down to show a 0.6% gain in the 2nd quarter compared to the previous preliminary release which showed the economy climbing 0.9%. The difference was a bigger liquidation of inventories than previously reported.

EUR/JPY - Yen Pares Euro's Rally This Week

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Despite some better data out of China, Japanese stocks were down on the news and the Yen gained in risk aversion. The Euro-Yen for instance, broke an upward sloping line of support and plunged more than 200 pips from its open to find support near 131.60. The pairs decline extended into NY trading as US stocks fell after running higher for five straight days.

GBP/JPY - Pound Pares 61.8% of Recent Rally

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The Pound-Yen fell in today's trading as well, hitting a new low for this week at the 150.50 level. That was a 61.8% retracement of the recent rally from September 2nd. Here too we saw a break of an upward sloping line of support, though in this pair compared to the Euro-Yen we had a period of mainly sideways trading this week as opposed to a rally.

USD/JPY - Greenback Falls to 90.22

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The Dollar-Yen fell further as well, breaking below the downward sloping line of support that it had established this week. The greenback hit a low near 90.22, which adhered to a slightly longer support level. The Yen is a big winner for this week against the greenback, though the greenback was pressured against most of its rivals.

EUR/USD - Euro's Gains Slow Against the Greenback

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The Euro-Dollar pair had another choppy session, with the pair staking out a slightly higher high for the week at the 1.4634 level. Following the break of the 1.43 area early on in the week, the gains by the Euro have subsided as buying momentum waned.

US - Consumer Confidence Jumps

In fundamental news from the US today, the preliminary version of September's UMich consumer sentiment jumped to 70.2 from 65.7 in August. That was a higher reading that expected by economists, and was a result of both better current conditions and future expectations. Consumers are seeing that the pace of job losses in the country is slowing and that other indicators are pointing to the end of the recession. Even though sentiment is up it may still be some time before consumers begin spending in a manner that will help the recovery.

US - Wholesale Inventories 1.4%

A second release showed inventories falling 1.4%, as sales climbed. It was a record 11th straight month that inventories had depleted stockpiles. The implication is that firms will have to restock, which could help to boost orders with manufacturers.

NZD/USD - Kiwi Keeps Rallying

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In our look at a final pair, we see that the New Zealand Dollar-US Dollar pair extended its gains from yesterday, to move to the 0.7090. The pair broke resistance at 0.69 to start this week, and finishes the week up about 160 pips. With signs that the global economy is recovering, ti is boosting demand for higher yielding assets such as the Kiwi. The Aussie, reached a one-year high against the greenback this week, but today saw very limited sideways trading.

Upcoming Releases

Next week, the US will post data on retail sales, consumer and producer prices and housing starts. That should give a picture of US consumer spending, inflation and the housing sector. The UK will post its employment change for August and the Euro-zone will reveal its ZEW economic sentiment in the first half of the week.

Capital Market Services, L.L.C.