Euro Broadly Firmer Ahead of ECB

The Euro steadied versus the Japanese Yen during the Asian trading session regrouping from the earlier struck low following comments made by Japan’s Finance Minister who said that the country would purchase the Eurozone’s bailout fund bonds which were issued by the European Stability Mechanism. Taro Aso had said that the Japanese government’s purchase of ESM bonds was meant to help stabilize the Eurozone economies. Analysts say that the Euro is poised for further gains, however, if the European Central Bank lives up to expectations and decides to hold the status quo on interest rates at their next policy setting meeting scheduled for Thursday.

As reported at 11:21 a.m. (JST) the EUR/JPY pair had surged to 115.25 Yen from 114.60 Yen before returning to 115.13 Yen. The USD/JPY pair was trading at 87.67 Yen, a 0.1% decline, but off the session’s low of 87.23 Yen. The majority of analysts had been expecting a pullback in the U.S. Dollar, which had jumped almost 12% since November on investors’ expectations that a new Japanese government would be able to force the Japanese central bank to take on a more aggressive monetary policy to revitalize the stalled Japanese economy. Profit takers booked last week’s gains after the greenback rallied against the Yen on the EBS trading platform on Friday, trading then at 88.48 Yen, a level unseen in about 30 months.