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Session Recap: Massive Yen short's squeeze; Nikkei climbs to late 2007 levels

FXstreet.com (Barcelona) - The week started in Asia-Pacific with an early and massive short squeeze on Yen, following Japan FinMin Amari saying current depreciation in Yen levels has been already enough. This sent all USD pairs initially higher as the greenback was broadly weaker, with USD/JPY printing session lows at 101.93, EUR/USD session highs at 1.2852, and AUD/USD session highs at 0.9791.

Nikkei index kept on moving higher no matter what, and printed fresh highs above the 15300 points mark, highest seen since late 2007, while Shanghai index added +0.89% of gains, and all local share markets show green lights across the board catching up on Friday's new all time US equity highs. SP500 futures remain unchanged near its all time highs.

Silver crashed to fresh 2.5-year lows barely above the $20 mark, opening with a -8% gap lower, and Gold also easing to fresh 1-month lows around the $1337 level. Oil instead moved range bound around the $96 figure, little changed from previous Friday weekly close. No major news were released in the Asia-Pacific, ahead of a session in major European markets practically closed over holidays.

Main headlines in the Asian Session:

Toxic bank assets will sink Chinese banks — fund manager

Correction of the Yen largely completed, Amari says

Japan's economic minister successfully talking up the Yen

Silver market collapses in early Asia

USD/JPY clawing back losses after massive bounce off 102.00

EUR/JPY buyers step in again at 131.00, support remains firm

Nikkei: Up up and away

Flash: The biggest risk to the dollar comes from Fed - BBH

Sterling bulls continue to defend the 1.5150 level

Bearish development on EUR/USD charts continue to take shape

It was a rough week for the EUR/USD, as continued speculation of the Fed tapering QE purchases and worries of economic growth in Europe continued to put pressure on the pair throughout the week. When all was said and done, the pair finished the week down 0.90% to close at 1.2838. Market participants will be focusing on a number reports this week including testimony from Fed Chairman Bernanke, as well as speeches by some regional Fed officials.
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Flash: We expect AUD/USD to remain heavy - UBS

The Aussie Dollar has been under tremendous pressure lately, falling just over 900 pips in the past few weeks and trading at its lowest level in over a year.
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