Yen crosses were the focus overnight as the world equity markets gave back Wednesday's gains; traders continue to buy Yen against all major pairs putting a bit of upside pressure on the USD. However, the big news today is the surprise 1.5 BP cut in interest rates by the BOE. In the statement the BOE said that inflation pressures were dropping and that the need for stimulus was apparent.

Rate two-way in solid action; bids on dips from profit-taking shorts some desks report. Drop through early support finds stops and new lows attract technical selling.

Semi-official names on the offer near the highs with stops reported on a move over the 1.2900 area. 1.2700 handle fails to hold on a dip and stops likely cleared. Hook reversal showing from the toolbox suggests aggressive traders can buy the rate on dips.

Rate possibly getting spillover effect from GBP. Support also from cross-spreaders as they unwind Yen. Official interest noted traders say.

Rate falls back on cross-spreading reverses and fears of a large rate cut loom over traders; rate continues to correct into buy zone. Stops noted on the move lower during the day suggesting some bid interest is early. Traders note unwinding of Yen cross-spreads driving a lot of trade after the open.

Large range suggests more volatility coming soon. Traders note liquidity is better than last week. Aggressive traders can buy anytime on weakness but expect more whippy action. Two-way action likely to continue.

Confirmed sovereign interest on the dip as semi-officials seen on dips in both EURO and GBP recently; lately middle-east names. Traders expect follow-on selling into Asia and then possibly the bottom.

The USD continued to advance today against the majors with the exception of the Yen; making new highs in New York trade into the end of day after the London fix. Traders were expecting potential for more month-end USD buying although not on the scale seen last week and with weaker energy and equities the USD firmed all day.