The pair is likely to trade in a tight range today in Asia, before the Bank of Japan launches a two-day policy board meeting on Monday amid growing political pressure. Shinzo Abe, the head of the Liberal Democratic Party, called on the Bankof Japan to directly purchase government bonds to help fight deflation. Abe is considered to be a strong candidate for the new prime minister following the Dec. 16 general election. Abe also said last week that the BOJ should consider “unlimited” monetary easing and cutting the policy rate to zero or below zero until Japan achieves consumer inflation of 2% to 3%. Investors will also focus on any developments on the sovereign debt crisis in Europe before EU finance ministers hold a meeting on Nov. 20 after having failed to approve additional financial aids for the debt-laden Greece. The pair finally breaks through a key resistance of Y81.49, which was a 61.8% Fibonacci retracement of its decline from year-to-date high of Y84.18 on March 15 to a year-to-date low of Y77.13 on Sept. 13. A break here is now shifting focus to next major resistance at Y81.78, which was the April 20 high. The rate is at Y81.57 following a Y81.22 to Y81.59 range and versus Y81.32 in late New York on Friday.
EasyForexNews Research Team