* USD/JPY was lifted to a 1-month high of 123.80 in Asian trading on rumors a major Japanese retailer was facing bankruptcy, plus similar rumors concerning a major bank and construction company. However, the pair reversed course after BOJ governor Hayami said that inducing a weaker JPY was not appropriate, nor would it be reasonable for the JPY to weaken under the circumstances of trade and current account surpluses. Hayami added that the BOJ will consider timely steps if the economy worsens. The pair dropped to an intraday low of 122.78.
In other news, Japanese supermarket chain operator Mycal Corp. said the reduction of interest-bearing debts has been promoted smoothly as outlined in its restructuring plan in January, after shares in the company faced heavy selling Tuesday. (story .12790). Mycal shares tumbled 15.9%, or 21 yen, to 111 yen on concerns over the company's financial standing, contributing to the Nikkei's turnaround into negative territory in the afternoon.
The outlook is mixed, with support at 122.50 from a Gann 50-point pivot that targets 122.00 and 123.00.

Support: 122.78 (overnight low), 122.50 (Gann 50-point pivot; targets: 122.00/123.00), 122.41 (60-day moving average), 121.05 (Gann 50-point pivot; targets: 120.55/121.55), 120.89 (20-day moving average).
Resistance: 123.80 (overnight high), 124.00 (Gann 50-point pivot; targets: 123.50/124.50), 124.05 (May 16 peak), 124.35 (April 27 peak), 125.50 (Gann 50-point pivot; targets: 125.00/126.00), 126.84 (April 2 high; 29-month high).

* EUR/USD showed little reaction to data that showed euro-zone industrial production fell a greater-than-forecast 0.5% on the month in April to give a 1.6% y/y rise. The pair extended an overnight drift lower to touch a 5-day low of 0.8563.
German "wise man" Siebert said the ECB was not in a position to cut interest rates as inflation is clearly above the ECB's interpretation of price stability, and that inflation dangers in the medium term should not be underestimated.
EUR/CHF dropped to a 2-day low of 1.5272 as frustrated longs sold after the cross' failure to take out the 1.5320 area on Friday/Monday. Swiss PPI fell 0.1% m/m and rose 0.7% y/y in May.
The intraday outlook is slightly bearish, with support seen at 0.8541 from the 20-day moving average.

Support: 0.8553 (overnight low), 0.8541 (20-day moving average), 0.8411 (June 11 low; 6-month low), 0.8372 (Nov. 23 low), 0.8245 (1.382% Fibonacci extension level the Jan. 6-May 4, 19 downtrend; target of fifth Elliott wave), 0.8228 (Oct. 26 low; lifetime low).
Resistance: 0.8615 (overnight high), 0.8790 (38.2% Fibonacci retracement level of the June-October downtrend), 0.8848 (61.8% Fibonacci retracement level of the Nov. 27-Jan. 5 uptrend), 0.8889 (200-day moving average).

* EUR/JPY tripped to a 4-day low of 105.21 on profit taking after peaking Monday at a 27-day high of 106.57. The outlook is mixed around 105.80, the 38.2% Fibonacci retracement level of May 1999-October 2000 downtrend.

Support: 105.21 (overnight low), 103.26 (20-day moving average), 103.12 (200-day moving average), 99.85 (June 1 low; 5 1/2-month low), 97.22 (Dec. 12 trough).
Resistance: 105.80 (38.2% Fibonacci retracement level of May 1999-October 2000 downtrend), 106.35 (overnight high), 107.37 (60-day moving average), 107.91 (100-day moving average).