US Trading Preview ,
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  Interest Rates   US: Japan: Eurozone: UK: Switzerland:   1.75%  0.15%  3.=
25%  4.0%  1.25-2.25%       [IMAGE] =09 [IMAGE]  JPY Cools on Jawboning, Be=
wildered USD Awaits Data  March 8, 7:00 AM: EUR/$..0.8783 $/JPY..128.15 GBP=
/$..1.4253 $/CHF..1.6728  JPY Cools on Jawboning, Bewildered USD Awaits Dat=
a by Jes Black  At 8:30:00 AM US Feb Payroll Employment (exp 9k, prev -89k)=
 US Feb Unemployment (exp 5.7%, prev 5.6%) US Feb Avg Hourly Earnings (exp =
0.3%, prev 0%) US Feb Avg Work Week (exp 34.2%, prev 34%)  The dollar recov=
ered to back above 128 yen after Thursday's record four-yen decline and reb=
ounded one half cent against the euro from an overnight 6-week low of 88.40=
. Further gains in the Nikkei today had little effect on the yen and trade =
was subdued ahead of key US jobs data due at 8:30 AM.   Japanese official, =
Kuroda, said the Finance Ministry would take action against rapid currency =
fluctuations. This helped the dollar come off recent lows. However, it lack=
ed urgency as BoJ Governor Hayami said he was not worried about current FX =
levels. Instead, Hayami gave credit to the recent move as part of the BoJ's=
 monetary policy easing last week. Dealers also suspected the government's =
top priority is to keep stocks strong ahead of fiscal year-end bookclosings=
 as dealing with a financial crisis would be worse than the effects of a st=
ronger yen.   USD/JPY is now supported at 127.75, which marks the 38.2% ret=
racement of the 115.75-135.15 move provided a solid base for a corrective r=
ally in the pair. However, speculators who had been on the sidelines have p=
oured in to go long the yen. Therefore, USD/JPY could still target 125.28, =
the 50% retracement of the same move. More importantly, the yen is approach=
ing its 200-day moving average of 125 for the first time since November.  M=
eanwhile, the government's resolve to boost Japanese assets ahead of March =
31 is likely to fend off any negative news that comes its way. Case in poin=
t was today's 2% rise in the Nikkei despite Japan's Q4 GDP which fell 1.2% =
q/q and was the first time in nearly a decade that output had fallen three =
quarters in a row. The figure attracted little attention and instead, talk =
of a global recovery has sparked a wave of foreign money coming into Japan =
as large American banks have announced their repositioning in favor of Japa=
nese shares.  Japanese banks are pinning their hopes on the stock market ho=
lding onto recent gains, at least until the end of the fiscal year end on M=
arch 31, when they book their massive stockholdings at market value. If pla=
yers can hold the Nikkei at 12,000, banks could slash latent stock losses b=
y trillions of yen, help improve their capital adequacy ratios and keep the=
m  solvent.    However, this would still not solve their fundamental proble=
ms. Therefore, there still remains doubt as to whether the Nikkei can maint=
ain its recent gains after the March 31 fiscal year end and whether the spe=
ctacular rise in yen on speculative trading will come undone over the next =
few weeks. BoJ Governor Hayami alluded to this today when he said he expect=
ed the market to be stable through the end of March, but did not say what c=
ould happen afterwards.  USD/JPY fell nearly 5% this week alone, while EUR/=
JPY fell only 3%. This gap has been filled by the 2 cent rise in EUR/USD an=
d supports the notion that rise in the yen is strictly a Japan-driven play =
rather than a global growth-driven play. The enforcement of anti-short-sell=
ing laws in Japan and the rebound in the Nikkei enhances the yen repatriati=
on play.  EUR/USD fell to a day's low of 87.80 as it retreated from an over=
night high of 88.40. On Thursday, the market ignored the European Central B=
ank's decision to keep rates steady at 3.25%. Markets had anticipated the c=
entral bank would take no action due to growing signs of Eurozone economic =
recovery and rising inflationary pressures. But despite the recent rise in =
EUR/USD, the dollar's weakness is primarily contained to the yen. Neverthel=
ess, the euro is still threatening to take out 88.10 cents, which is the 50=
% retracement of this year's move 90.63 to 85.63. From there, the euro face=
s its next resistance at 88.50. Support is viewed at 87.0, backed by 86.65 =
and 86.30.  The pound was also steady against the dollar around 1.4250 afte=
r whipsawing between a 1-1/2 week high of 1.4313 against the dollar, and a =
2-session low of 1.4184 cents. Resistance is still seen at 1.4300 and the 2=
00-day moving average of 1.4333, followed by 1.4370 and 1.440. Support hold=
s at 1.420, 1.4170 and 1.4130.  Traders will watch today's US labor report =
for signs that the recession is taking less of a toll on the workers. The l=
abor market is expected to begin a service production recovery while manufa=
cturing payrolls will continue to contract. US employment labor report is e=
xpected to show the creation of 5K to 10K in non-farm payrolls, though some=
 private forecasts expect the creation of 100K. The unemployment rate is ex=
pected to rise to 5.8% from 5.6%, while average hourly earnings are seen up=
 0.3% from 0.0%.  =09[IMAGE] Audio Mkt. Analysis Yen Soars 3.5% vs USD     =
  Articles & Ideas  Yen's March Madness   Will Dollar be Fuelled against th=
e Euro?       Articles & Ideas Forex Glossary   Economic Indicators   Forex=
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