The yen is liable to drift weaker in the short term as aggressive global monetary and fiscal action, including the Chinese action, provides some support to risk appetite.

The dollar found support below 97.50 against the yen on Friday, but was unable to sustain a move above 98.50 as US economic fears persisted following the very weak payroll report and there were also increased concerns over the global implications.

Over the weekend, the Chinese government announced a US$600bn stimulus package which helped improve sentiment on hopes that the regional and global economy could be stabilised. There was a significant rally in regional equity prices with the Nikkei rising by around 5.0% and there will be expectations of further measures to support economic by the principal global authorities.

The economic fears will still be a very important influence and Japanese core machinery orders fell by 10.4% in the third quarter despite a 5.5% increase for September. The dollar struggled to move much above 99.0 against the Japanese currency will resistance levels still difficult to break as market confidence remains very fragile.