With no major market-affecting news or economic indicators out yesterday to change the market’s direction, the continued rise in USD/JPY towards the 100 level was the major story. The last time USD/JPY approached the magic number was in March of 2009 and it took almost a month of consolidation to break through. This time however it seems likely that the momentum caused by the Bank of Japan’s radical new measures (plus the rising tensions on the Korean Peninsula) will push it over the mark faster. The major risk to a long USD/JPY position would seem to be verbal intervention from the Japanese authorities, in our view.EUR/USD has risen somewhat as German industrial production was slightly better than expected yesterday, European equities rallied, and inflows from Japan pushed down bond yields across the Eurozone, including both core and periphery. Yet EUR/USD could not break through Friday’s highs. This was perhaps because of the new tensions in Portugal, where the Constitutional Court blocked some austerity measures that the Troika was demanding. The astonishing comments of the EU commission, which said that it is happy that the Portuguese government chose to ignore the ruling of its court, threatens to cut funding if the Portuguese government does not follow its prescriptions, and recommends that democratic discussion about the measures does not take place, shows the huge chasm in thinking between the Eurozone elites and what is happening on the ground in the peripheral countries. This gap in thinking and insistence on failed austerity measures is likely to keep the tensions in the Eurozone and cap any potential EUR/USD rallies.Mr. Bernanke speaks at an Atlanta Fed conference today along with the Bank of England’s Mr. Haldane. US wholesale inventories and the JOLTS job openings are the only US indicators out and they are usually not market-movers. Most of the market-affecting indicators out today will concern the UK, where industrial production, trade, and several housing indicators are due. Signs of a recovery in output, as the market expects, could boost sterling.