JAPAN: Some traders pointing to a Nikkei News article saying that the Financial
Services Agency plans to take a new approach in dealing with troubled financial
institutions, thereby forcing investors to take losses if need by to reduce the
burden of taxpayers. The new requirement will cover deposit-taking institutions,
brokerage and insurance firms. These firms would issue new types of preferred
shares or subordinated bonds that could be converted into common stock and
written down in value, if the financial authorities declare a firm insolvent
(this called a "bail-in"), the Nikkei report says. The report notes that the FSA
moves are in accordance with new Basel III capital requirements (adopted by big
Japanese banks in fiscal 2012).
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US TSYS: Treasuries hit new session highs; 10-year note yield is at 2.186% amid
weaker US stocks, firmer Japanese yen, risk-off mood, with traders citing the
Nikkei News story on the Japan FSA plans.
DOLLAR-YEN: with dollar-yen spooked by the Nikkei news story re forcing losses
onto investors, fresh stops being triggered and making a low at Y95.77
currently. Some bids were reported down here earlier but stops are not too far
away either . Support also seen at bottom of the Ichimoku cloud at Y95.41 .
DOLLAR-YEN: Traders assessing what to do next in dollar-yen, after the pair has
fallen to lows near Y95.70, over 3 big figures from the Y99.06 high seen
overnight. The yen strength seen on the day was initially driven by
disappointment in BOJ action (or lack of action), and later by position unwinds.
As mentioned earlier, liquidity is a nightmare and stops are easily tripped off.
The pair has taken out initial support at Y95.79, which is the 61.8% Fibonacci
retracement of the Feb lows at Y90.88 to the Y103.74 peak seen May 22. Strong
demand is seen at Y95.50 and Y95.20, ahead of the Y94.99 low seen last Friday.
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