We were carrying a partial short position from 118.40 as USD/JPY collapsed on the back of broad-based USD selling. Yen, however, is atop the overnight leader board as we currently trade almost 0.8% better against the dollar from yesterday's 5:00 p.m. close. Euros are only 0.65% better against dollars, reflecting an only slightly weaker EUR/JPY, which is rather surprising in my opinion. Japanese policy makers have been busy talking up Yen (down EUR/JPY, USD/JPY), reflecting improving economic conditions. USD/JPY has taken the BOJ and MOF comments at face value, but EUR/JPY is defiantly only 0.10% lower from yesterday's close.

If you are still short USD/JPY from yesterday, look to book a majority of profits as .618 Fib retracement at 116.28 contained the selling. Cancel remaining offers at 118.48 and 58 that were not triggered last night. We will be looking to re-offer USD/JPY tonight.

Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

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The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.