The yen rally on thoughts of cash repatriation by Japanese banks and insurers drove the yen to highs vs USD, The G7 followed Japans intervention in the currency markets for the first time in 10 years. The result was significant:
As well, Libya said it is ceasing all military action and will start talks with rebels, reacting the day after a United Nations vote cleared the way for strikes against leader Muammar Qaddafi’s regime. Libyan Foreign Minister Moussa Koussa made the announcement in a televised news conference carried by Al Arabiya TV today, adding that the UN resolution authorizing a no-fly zone violates the UN’s charter. British and French leaders began preparing for possible air strikes against Libya after a United Nations vote cleared the way for the first Western military action against an Arab country since the 2003 invasion of Iraq.
Treasuries are being swapped into risk:
But, not all is peachy in Japan:
Engineers plan to work into the night to restore power to two of the crippled reactors at Japan’s damaged Fukushima Dai-Ichi power plant, while Prime Minister Naoto Kan described the crisis as “very grave.” Tokyo Electric Power Co. said it may finish reconnecting a power line to the No. 1 and No. 2 reactors by tomorrow morning. The electrical link would be used to restart pumps needed to protect fuel rods from overheating. However, the company said it’s possible the water pumps, damaged in the March 11 tsunami, might not work even with power, Hikaru Kuroda, chief of Tepco’s nuclear facility management department said tonight in a Tokyo news conference.
As we head into the weekend, we must be aware of the factors that have driven the risk-on trade for any changes.
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