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The Hang Seng has been playing catch up to the gains seen in China yesterday while the Shanghai Composite and ASX 200 are also enjoying solid gains. While equities are drifting higher, sentiment has not really changed though, as key currency pairs are relatively flat. One of the few developments from overnight trade were comments by Fed vice chair Stanley Fischer and Fed member Loretta Mester. Fischer spoke in Israel and discussed an early lift-off accompanied by gradual hiking as opposed to a later lift-off and steep hiking thereafter. Meanwhile, Mester said the time for a first rate hike is near should data meet her forecasts. Perhaps this is what has helped the greenback to continue drifting higher against the majors with USD/JPY creeping towards ¥122.00 and EUR/USD now below $1.1000. Should USD/JPY test ¥122.00, this would be the third attempt at breaking this barrier over six months. A close above ¥122.00 will only give bulls more conviction and I suspect this would also be the catalyst the Nikkei needs to resume its rally. The Nikkei has been fairly flat today and I feel some investors are exercising caution as USD/JPY approaches a key level.