Updating time : 12/11/2007 23:41 GMT

USD/JPY - 109.60 ... Active unwinding in yen carry trades due to risk aversion continued to put pressure on the dollar n despite y'day's intra-day rebound fm 109.85 to 110.73 in European session, renewed selling quickly emerged n the pair fell again in NY morning to 109.12 b4 recovering briefly abv 110.00 on short-covering ahead of today's BOJ rate decision.

Today, although the greenback has retreated again fm o/n high at 110.12, a breach of said y'day's low at 109.12 sup is needed to confirm recent decline has once again resumed n extend weakness to 2006 low at 108.97, however, as hourly oscillators' readings have already displayed bullish convergences, suggesting downside wud be ltd to 108.50/55 (62% proj. of 113.30-109.85 fm 110.73) n reckon 108.00 wud hold fm here, bring a much-needed corrective rebound later.

Therefore, wud not advise chasing current fall here n wud be prudent to sell dlr on subsequent bounce as upside shud falter below 110.69/73 (present lvl of 55-hr ema n y'day's European high). Only abv 111.12 wud signal temporary low is made n risk correction to 111.50 but 112.00 (prev. sup) wud remain intact...

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