London, May 24 (BridgeNews) - The following is a summary of overnight moves since Europe's close, plus possible leaders for the session ahead: KEY ISSUES:

* EUR continues to implode, EUR/JPY positions continue to weigh, drags USD/JPY * USD continues to rally; USD/JPY attractive after EUR/JPY fall out?
EUR/JPY bungee jump sets the tone

--Recent volatility continued overnight, with EUR/JPY dragging both EUR/USD and USD/JPY lower before all three bounced amid unconfirmed (and now apparently doubted) rumors of BOJ intervention.
--Japanese Finance Minister Shiokawa kick-started the volatility by saying Wednesday's strengthening of the JPY was "OK" as it just reflected a temporary correction in the EUR. This cancelled out a warning by Japanese Finance Minister for International Affairs Kuroda that recent FX moves do not reflect fundamentals, and slammed EUR/JPY down to a 5-month low of 101.04. USD/JPY tumbled in tandem to a 2 1/2 month low of 118.80. Talk of BOJ intervention then saw EUR/JPY snap back to as high as 103.60-65 and USD/JPY recover to 120.05-10.
However, some traders claim the rebound was fuelled by bids in defence of a 101.00 option play. CNBC also reports that Shiokawa returned to say he was watching FX markets closely, but that he preferred a hands-off approach. On the data front, Japanese April chain store sales fell 5.5% on the year, while department store sales were unchanged on the year. BOJ's Taketomi said it would be difficult for the BOJ to decide on additional policy easing at the moment.
--After dropping to a 6-month low of 0.8480 on rumored U.S. hedge fund sales, EUR/USD bounced back with EUR/JPY to as high as 0.8574. CNBC reports talk the BBK bought EUR for commercial purposes. The U.S. Senate finally passed the Bush administration's tax cut plan late Tuesday. Also after Europe's close, German Finance Minister Eichel said German price pressures were temporary. The Financial Times, meantime, said in an editorial that the ECB should stand ready to ease policy. Volumes are likely to be reduced in Europe by a holiday across much of the confident. The ISAE index of Italian consumer confidence for May is the data highlight in Europe at 0730 GMT. U.S. Treasury Secretary O'Neill speaks from 1330 GMT, Fed's Jordan from 1630 GMT and Fed's Greenspan from 0020 GMT.
--The CHF followed EUR/USD's swings. USD/CHF pulled back from a new 6-month high of 1.7920, while EUR/CHF bounced from a 5-week low of 1.5217.
--The GBP was less successful, with cable dropping to a 6-month low of 1.4128 but EUR/GBP only briefly slipped to a 5-month low of 0.6018. This was despite the FT reporting that UK Chancellor Brown has expressed concern about the policies and practices of the ECB. He reportedly said this would be taken into account in any U.K. decision whether to join the EUR, although his aides claimed this was not creating an extra hurdle for EUR-entry. The CBI's quarterly industrial trends survey is due at 1000 GMT, while the U.K. auctions 2.5 billion GBP of new mediu-term Gilts maturing March 2012.
--USD bloc currencies also generally responded to EUR/USD. AUD/USD and NZD/USD bounced from 3 1/2 week lows of 0.5089 and 0.4149 respectively, with the latter showing little reaction to the New Zealand budget. USD/CAD, meantime, held below Tuesday's 8-day high of 1.5535 hit in New York. BridgeNews