The pair is likely to trade with a firm undertone today in Asia amid lingering speculation that the Bank of Japan would face stronger political pressure to ease the monetary policy under the government, led by Shinzo Abe, who is an advocate of aggressive monetary easing. Abe, who became Japan’s 96th prime minister on Tuesday, has repeatedly urged the BOJ to set an accord with the government, conduct monetary policy “unlimitedly” and double consumer inflation target to 2%. The BOJ will hold next policy board meeting on Jan. 21 and 22. The yen reached Y86.15 versus the dollar, the lowest since August 2010, while hitting Y114.32 versus the euro, the least since July 2011. Any gains in the dollar are likely to be trimmed due to growing uncertainties about prospects for U.S. budget talks after Senate Majority Leader Harry Reid said the U.S. may fall off the so-called fiscal cliff. gI donft know time-wise how it can happen now,h Reid, a Nevada Democrat, said. The rate moved from Y85.48 to Y86.15 on Thursday.
EasyForexNews Research Team