The Japanese Yen is edging close to a 2-week low against the U.S. Dollar as investors take positions against the possibility that the Bank of Japan’s monetary policy becomes looser at the conclusion of this week’s policy setting meeting. The Euro was steady against the greenback, however, as markets await the outcome of the ECB meeting later today. Analysts don’t expect that the Bank of Japan or the ECB for that matter will alter current monetary policy, given their recent easing efforts, but speculate that some movement from the Japanese central bank could be seen going forward.
As at 11:46 p.m. (JST) in Tokyo, the USD/JPY pair was trading at 78.47 Yen, unchanged from late trading in New York and close to the Wednesday’s trade of 78.585 Yen. The EUR/USD pair was trading at $1.2914, again relatively unchanged from New York trade, and needs some additional impetus to break through the tight trading band. That impetus may come from the sovereign bond market; Spain is set to auction 2, 3 and 5-year debt later today and is hoping to raise a total of €4 billion, with the real question how high will yields rise this time? The ECB won’t be able to buy Spain’s debt until after the government officially requests financial aid.