It’s been a busy morning in Asian trade with currencies and equities making some big moves in both directions.

The Nikkei sold off hard and is down more than 1.25%. It's started to establish a base at the bottom of the day's range.

Chinese Inflation data came out slightly below expectations at 1.4% (vs 1.5% expected) while PPI was 5.5% (vs 5.6% expected).

The Yen has been strong today compared to the USD. As we suggested in our Morning Preview, it has successfully taken out the all important 110.000  You can find out more about horizontal levels on our strategy pages.

Bearish Bias

For the time being, we want to look to continue trading with the day's momentum. If the USD/JPY can hold below support, look for another leg lower.

It’s hard to see the Nikkei falling away much further given the magnitude of the move so far today – but it would be difficult to try and pick a bottom just yet.