The pair is likely to maintain a firm undertone today in Asia amid lingering expectations that the Bank of Japan would have to ease the monetary policy further if the main opposition LDP wins the Dec. 16 election. The Nikkei reports that the LDP will include forming an agreement with the BOJ to work toward meeting a 2% inflation target in its campaign promises and stipulates the need for creating a mechanism for strengthening cooperation between the government and the central bank, possibly by revising the Bank of Japan Law. Forecast-beating U.S. housing data and growing hopes for averting the fiscal cliff there will also support the dollar. The yen may also see some blow from the release today of trade statistics, which is expected to show that Japan incurred trade deficit for a fourth straight month in October. Investors will also focus on any developments on talks of additional financial aid for Greece and ongoing political tension between Israel and Palestinian groups for implications for risk sentiment. The rate moved from Y81.14 to Y81.76, the best level since April 2, when it reached Y81.78, on Tuesday.
EasyForexNews Research Team