The pair is likely to trade in a tight range today in Asia, with uncertainties over talks on the debt ceiling in the U.S. weighing on sentiment toward the dollar. President Barack Obama said Monday that failure to lift the debt limit threatens to push the economy into recession. But lingering expectations for aggressive monetary policy action by the Bank of Japan will continue to support the downside. The Mainichi Shimbun reported that the government, led by Prime Minister Shinzo Abe, may consider ex-MOF officials as candidate for BOJ governor, replacing Masaaki Shirakawa. Former vice finance minister Toshiro Muto, Yasutake Tango, Eijiro Katsu, are now considered as candidate for the top BOJ position, it says. Abe said over the weekend that he wanted someone “who can push through bold monetary policy” as the next Bank of Japan governor and that the next BOJ governor must be a “bold policy leader.” Shirakawa will step down in April. The BOJ will hold the next policy board meeting on Jan. 21 and 22 amid increased political pressure for more action. On Monday, the rate moved from Y89.09 to Y89.67, the highest since June 2010. The yen also hit Y120.13 against the euro, the lowest since April 2011.
EasyForexNews Research Team