Yen Pressured as Markets Await BOJ

The Japanese Yen was broadly lower during the Asian trading session, striking a 16-month trough versus the common currency Euro and a 7½-month low against the greenback, as investors consider what tomorrow’s conclusion of the Bank of Japan’s policy meeting might hold. As reported at 12:20 p.m. (JST) in Tokyo, the EUR/JPY pair was trading at 111.73 Yen, a gain of 0.3% while the USD/JPY pair edged to 84.30 Japanese Yen, a 0.2% rise and not far from the 84.48 Yen high struck on Monday, a 20-month peak for the greenback.

The Euro was also higher against the U.S. Dollar, with the EUR/USD pair trading at $1.3256 on the EBS trading platform, a level not seen since May. The pair is currently trading higher at $1.3249. Higher risk currencies are getting some increased action as the U.S. government appears to be working at solving the impending fiscal cliff.

The Bank of Japan is expected to announce further easing steps, and as a result selling of Yen-crossed pairs has been relatively persistent and has helped to push the Yen lower. Some market players expect that the USD/JPY pair is likely to be supported going into the BOJ decision, with some believing that the pair could trade as high as 84.60 Yen to 84.80 Yen just ahead of the BOJ announcement.