JPY added to gains as profit taking picked up following yesterday's BoJ policy decision. USD-JPY fell from 88.75 to 88.10 by late Asia. Japan PM Abe continued with the same rhetoric on correcting excessive yen strength, but there was no impact. EUR and GBP maintained narrow ranges close to Tuesday closing levels around 1.3300 and underneath 1.5850. AUD came under pressure after weaker than expected CPI data reinforced expectations of a RBA cut in February, which forced it back from 1.0575 to 1.0530. After yesterday's European close BoE Governor King said that the BoE is ready to provide more stimulus if needed, but added it is sensible to review the BoE monetary policy regime.

[EUR, USD]
EUR-USD traded a tight range between 1.3300 and 1.3330. EUR cross flows in Asia tended to offset eachother as JPY made up ground and AUD came under pressure. A EUR test of 1.3300 ran into bids from short term accounts, while under 1.3300 there is still support into 1.3265-70 and 1.3250, leaving the broader trading range intact.

[USD, JPY]
USD-JPY and the crosses found a bit of support on dips, but it could not stop the yen from strengthening further. USD-JPY saw some reasonable demand around 88.30-40, which took it back to 88.70, but it eventually fell to 88.10 by early Europe as speculative flows overwhelmed real money orders. There are stops building below 88.00 and large orders are noted through 87.80. Position traders will note the limited reaction from Japanese policy rhetoric since the BoJ decision, which may be indicative of more potential yen strength. There is still disappointment that the open-ended asset program will not kick off until January 2014.

[GBP, USD]
Cable remains under pressure on weak fundamentals and a bearish technical backdrop. BoE Governor King left the door open for more policy action in comments after the London close, which has left Cable over the 1.5800 area, where option barriers were tipped yesterday. The focus in Europe will come from PM Cameron's speech on the EU and the BoE minutes, which should reiterate Tuesday's remarks from BoE Governor King.

[USD, CHF]
EUR-CHF maintained a heavier tone and reverted to the 1.2350 area on good selling in Asia. Tuesday's close under 1.2400 was a short term bearish influence and funds have sold into the 1.2400 area overnight and targets a potential move on 1.2300. The cross is still correcting overbought levels, but on a fundamental basis the long term outlook will still depend on the eurozone's performance.

[USD, CAD]
USD-CAD backed away from the 0.9945 area due to a congestion of sell orders. The lack of movement around 0.9945 yesterday was pinned on option related activity. There are rumors that 0.9950 could be an options level and there are are confirmed barriers at 0.9975 and 1.0000 that will be well defended. We anticipate sideways to slightly higher levels in the very short term, with last Friday's break higher still supporting via positive short term indicators. However, positions are still likely to remain lower than average ahead of the BoC policy meeting. Longs are only likely to be at risk if support at 0.9900-10 gives way.