The greenback rallied helped by strong data as housing starts posted the best figure since November 2007. Housing starts rose by over 20% in April while building permits rose around 10%. This helped temporarily take the edge off concerns about the economy in Q2. The greenback surged across the board while treasury yields also climbed. A combination of these two factors kept US equities on the back foot as they struggled to post another record. Additionally, there is a bit of nervousness ahead of the FOMC meeting minutes. Strength in the greenback has been pivotal to the gains in Japan today. USD/JPY reclaimed the ¥120.00 handle and has now come within touching distance of ¥121.00. We had seen a long period of consolidation for the pair over the past few months and this week’s strength seems like it could trigger further near term gains. Japan’s GDP data was also timely as it came in well ahead of estimates at +0.6%. Clearly the economy is turning a corner and I suspect this can be attributed to the recent positive swing in trade balance numbers. The Nikkei managed to consolidate above 20,000 and could now be gearing up to retest late April highs.