Optimism about the IMF meeting may still abound in stock markets, but there were more declines for USD/JPY, with the currency pair unable to hold any gains made during the course of the day.
The drop hints at continuing caution in Asia about any resolution to the eurozone crisis, with fine words but little else emanating from Washington over the weekend. Politicians from around the world may have striven to impress upon Europe the magnitude of the crisis, but whether any of this will result in some tangible action from European politicians is another matter entirely. A poor reading from the Chicago Fed’s national activity index hasn’t helped either, with the index dropping to -0.43 in August, from -0.06 a month earlier. This decline was larger than expected, strengthening worries about the health of the US economy.