USD/JPY and the JPY-crosses have traded directly higher in line with gains in other risky assets like stocks and are representative of decreased risk aversion. As I’ve suggested above, I don’t expect the rebound in risk appetites to be sustained very much longer, with the likely catalyst weak US housing data next week. Concerning the G7 statement, the gain in EUR/JPY is an even greater ‘in your face’ to EU complaints, with EUR/JPY having gained around 5 yen since before the G7 statement. If the Europeans are concerned about the strength of the EUR against the USD, they’re even more concerned about the strength of the EUR against Asian currencies, of which the JPY is the most obvious. From Japan, exporters are increasingly likely to be selling USD strength into the 105.00-107.00 area, suggesting strength seen this week may be the extent of the recovery in USD/JPY. A daily close back below 103.00 would be a sign of a rejection. EUR/JPY has significant trendline resistance drawn off the highs dating back to last July and a break above 165.50 would be needed to see gains extend further. The whole outlook for a top in USD/JPY, EUR/JPY and other JPY-crosses hinges on risk appetites turning back to risk aversion, which will require a piece of negative real-world news.