The Japanese Yen began the trading week lower, with investors holding the Yen in check until after the Bank of Japan announces its monetary policy decision tomorrow which is widely believed to include additional easing measures to ensure that the 1% inflation target is met. Analysts believe that the Japanese central bank will likely increase its asset purchasing program by around $125 billion equivalent.
As reported at 1:30 p.m. (JST) in Tokyo, the USD/JPY pair was trading at 79.73 Yen, a gain of 0.1% from Friday’s late trade in New York but off the 4-month peak of 80.38 Japanese Yen struck on the same day. The EUR/JPY pair is also about 0.1% higher, trading at 103.09 Yen, off the 6-month high struck early last week when the pair touched on 104.59 Yen.
Market players are looking to the U.S. for additional hints of any improvement in the economy; on Friday, 3rd quarter GDP showed that the U.S. economy grew by 2% annually, better than the 1.9% analysts’ forecasts had called for. This week, the attention will be focused on the release of key U.S. labor data; non-farms payroll data was unexpectedly improved last month and traders will hope for a similar uptrend to validate an improvement in the labor situation.