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FXstreet.com (Barcelona) - The team at Brown Brothers Harriman believe that Yen weakness has been the main short term catalyst for the FX market, and the sell off has largely been driven by continued commentary from the LDP leader Abe who is expected to become the next Prime Minister of Japan.

They write, "Although Abe appears to have softened some of his aggressive rhetoric regarding the BOJ independence, he did reiterate his desire for it to buy foreign bonds. This helped send the dollar to new highs for the week against the yen near 82.75."

Market talk suggests some option barriers are in front of last week's high around 82.85 and may be restraining the greenback a bit here. The team note that Yen's weakness and the Euro's recovery from the decline seen in NY yesterday ket the cross rates in play.

"Cross rates adjustments helped lift the euro and sterling to new multi-week highs against the dollar. The move started in Asia and Europe consolidated the price action, correcting the over-extended intra-day technical indicators, clearing the way for another attempt on the euro and sterling's upside in North America today."
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