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The JPY has seen across the board strength in overnight Asian trade, with a pick up in caution evident. USD/JPY is down at 94.00 from a North American close Monday up around 94.50, while EUR/JPY is down at 134.50 from around 135.10. Chinese stocks have been hit again. Yesterday’s cautious rhetoric from Chinese Premier Wen Jiabao seems to have hit a nerve there, the official warning “We must clearly see that the foundations of the economy are not stable, not solidified and not balanced. We cannot be blindly optimistic.” China’s Construction Bank has come out and said excess cash in the banking system has led to asset bubbles. This has underscored concerns that lenders will rein in credit, which is helping undermine market confidence. Meanwhile a senior government economist Lu Zhongyuan, vice head of the Development Research Centre, has told an economic forum today, that Chinese investors are over-reacting to talk of monetary policy fine-tuning. He feels the recent slide in stocks will be short-lived. Elsewhere, worries over regional and local US banks have been heightened, with Atlanta-based Sun Trust Banks Inc warning that US financial institutions may report more credit losses as commercial real estate falters. For today in Europe: 06:00 GMT: German Q-2 GDP (final read) expected +0.3% q/q, wda -5.9% y/y, nsa -7.1% y/y 06:00 GMT: Swiss UBS consumption indicator July 07:15 GMT: Swiss employment level Q-2 expected 3.956 mln -0.1% y/y 08:30 GMT: UK BBA loans for house purchases July expected 37,800.