The pair is likely to trade in a tight range today in Asia, with investors waiting for fresh trading leads as the depreciation in the yen since November spur concerns about the outbreak of a currency war. Russia’s central bank said the world’s leading economies are on the brink of a “currency war.” Such a comment came after Feral Reserve Bank of St. Louis President James Bullard said that he’s a little disturbed by Japan’s stance and the risk of “beggar-thy-neighbor” policies, Luxembourg Prime Minister Jean-Claude Juncker said the euro’s rate is “dangerously high” and Akira Amari, Minister for Economy, Trade and Industry, said an excessive weakening in the value of the yen may hurt imports and households. Meantime, the Bank of Japan, which is now under strong political pressure to take more aggressive monetary action, will hold the next policy board meeting on Jan. 21 and 22. Investors will also focus on developments on talks on the debt ceiling in the U.S. for implications for risk sentiment and the FX markets. The rate moved from Y87.79 to Y88.87 on Wednesday.
EasyForexNews Research Team