• Former BoJ member Kiuchi stated that a de-facto normalization process for BoJ’s policy has begun and will gradually continue under Kuroda. He also stated that BoJ will not give up its ultra-easing but gradually moderate the degree of monetary support. Also, finance minister Aso stated that Japan has essentially escaped from the uneasiness linked to asset price deflation but policy makers have to do more. On other headlines, over half of Japan firms do not plan base pay rise this year, which was essential to governments’ plans to fight deflation. These developments could be detrimental for the JPY in the long run, as the last point may overshadow the former two.

• USD/JPY traded in a sideways manner yesterday near the 106.95 (R1) resistance level. We see the case for the pair to continue to trade in that manner with a bullish mood. Should the bulls, have the upper hand in the market we could see the pair breaking the 106.95(R1) resistance line and aim for the 108.30(R2) resistance hurdle. On the bearish scenario, we could see the pair trying to reach the 104.66 (S1) support level.

Luis De Guindos chosen as ECB new Vice President

• The finance ministers of the Eurozone chose Spain’s Economy minister Luis De Guindos as new ECB vice president. De Guindos is considered as “hawkish” as some remarks he made in the past were interpreted as such. The choice may pave the way for a Nordic presidency, possibly German and should that be the case we could see also a more hawkish ECB president as well. De Guindos responded to criticism of him being accepting the position while being an active politician, by stating that he will defend ECB’s independence. The appointment could enhance hawkish market anticipation for the EUR and hence support it in the long run.

• EUR/USD traded in a sideways manner yesterday, above the 1.2355 (S1) support level. We see the case for the pair to trade in a slightly bearish mood today. Should the pair find selling orders we could see it breaking the 1.2355 (S1) support line and aim for the 1.2230 (S2) support level. Should the pair find buying orders along its path we could see it trying to reach the 1.2455 (R1) resistance barrier.

In today’s other economic events:

• During European morning we get Germany’s PPI rate for January, Sweden’s CPI rate for January which could support the SEK and some volatility on the EUR/SEK could be expected and Germany’s ZEW economic sentiment indicator for February. Later on we get New Zealand’s milk auction data and dairy prices are to be released, Canada’s wholesale trade prints for December and last but not least Eurozone’s preliminary consumer confidence indicator for February.

USD/JPY

• Support: 104.66(S1), 103.65(S2), 102.68(S3)

• Resistance: 106.95(R1), 108.30(R2), 109.20(R3)

EUR/USD

• Support: 1.2355(S1), 1.2230(S2), 1.2100(S3)

• Resistance: 1.2455(R1), 1.2600(R2), 1.2766(R3)