--EUR/JPY also rose to a fresh 14-1/2-month high at 113.35 in tandem with USD/JPY's rise. However, selling from the 113.00 area was persistent and has made both USD/JPY and EUR/JPY's topside heavy. Those selling is believed to be mainly for liquidation of long positions for the cross. Traders also said that EUR's insensitivity to bullish comments by European officials was an indication that the cross is in technically overbought conditions.
--EUR/USD remains top heavy, though France's Finance Minister Laurent Fabius said Monday morning that the EUR would have further upward potential.
EUR/USD fell to 0.9470 from 0.9528 in part on selling of EUR/JPY.
--Fabius said he predicts the EUR would rise to parity against the greenback within weeks, the Financial Times reported Monday. The Belgian Finance Minister Didier Reynders also said the undervalued EUR has been strengthening as European economic growth prospects looked brighter than that of the U.S. and as the international markets began to recognize the currency's real worth.
--The EUR is still undervalued against the USD and is expected to continue to recover, European Union Economic and Monetary Affairs Commissioner Pedro Solbes said in an interview with the Nihon Keizai Shimbun. The paper reported Saturday that Solbes said when EUR stayed at its lowest levels against the greenback, he analyzed EUR was undervalued by 20-25%, and the current level of EUR is not yet appropriate. He said he did not think that the U.S. economic ec slowdown would also slow the European economy, and said he believes Europe would achieve economic growth of 3.2% this year. The market ignored those bullish comments from European officials.
--Japanese PM Mori said Sunday that his party will examine a range of measures to boost the fragile stock market, including full liberalization of the purchase and possession by companies of their own shares, the Nihon Keizai Shimbun reported Monday. Despite Nikkei's rebound on hopes for the government measures, the FX market little reacted to the news.
--The Nikkei 225 Stock Average ended the morning session 1.6% higher Monday as growing expectations of possible government stock-boosting measures led investors to cover short positions. High-tech blue chips were broadly higher on hopes of improving profitability due to the JPY's weakening. The Nikkei rose 213.23 points to 13,560.97.
--The Japanese economic data was also ignored. Japan's net fund inflows totaled 1.964 trillion JPY in December on a contract basis, compared with inflows of 182.3 billion JPY in November, the Ministry of Finance said Monday.
The data indicate no major selling of Japanese securities by overseas investors had occurred recently, despite falls in the country's stock prices. Net buying of Japan securities by foreign investors totaled 2.019 trillion JPY in December, overwhelming net buying of foreign securities by Japanese investors worth 55.6 billion JPY, the ministry said.
--Japan's current account surplus increased 22.1% in November from a year earlier to 972 billion JPY, the Ministry of Finance said Monday. The data compares with economists' average forecast of a surplus of 822 billion JPY. The country's capital account deficit stood at 677 billion JPY in November.