Asian forex market wrap: consolidation in quiet session

Asia led the way lower yesterday but today was a much calmer day with most regional stock markets rebounding from initial losses and this led to some profit taking on the JPY crosses. No data or financial markets comments of any note The Japanese general election now gets into full swing Australian treasury secretary says its too early to declare victory over the global financial crisis Gold recovers some losses, regional bourses mostly flat Japanese exporters in evidence selling USD/JPY between 94.80/95.00 Talk of Middle East sellers in cable above 1.6400 Sovereign names said to be buying EUR/USD on dips towards 1.4000. Possible barrier option protection at 1.4000 and again at 1.3975. Solid bids in USD/JPY at 93.80/94.00. We had a quiet pre-Tokyo morning session with most of the majors trading in 10-pip ranges close to their NY closing levels; EUR/USD at 1.4080, cable at 1.6340 and AUD/USD at .8200. Most traders waited for a lead from regional equity markets and when they opened only slightly lower and then started to rebound, traders took this as a signal to cover their short JPY positions and long USD positions. EUR/USD popped up to 1.4130 and USD/JPY to 95.00 before exporter selling in USD/JPY dampened the enthusiasm. Rumours of heavy cable selling above 1.6400 also dissuaded the bulls. Some light selling flows over lunchtime were enough to reverse the sentiment and most pairs have now returned towards their NY closing levels. Ranges: EUR/USD 1.4068/1.4130; cable 1.6328/91; USD/JPY 94.35/95.02; AUD/USD .8197/.8262; EUR/JPY 132.78/134.20. Markets: Nikkei- flat; Kospi -0.1%; HK -0.4%; Shanghai- flat; Gold +$3 @ $940/oz. Brent crude $70/bbl.