The pair is likely to trade with a firm undertone today in Asia amid growing speculation that the Bank of Japan would take more aggressive monetary action to deal with the prolonged deflation and also to help improve the employment. The Nikkei reports that Prime Minister Shinzo Abe now wants the BOJ to take responsibility in boosting employment in Japan. The business daily separately reports that the government and the BOJ will refer explicitly to a 2% inflation target in a joint statement on policy cooperation. The BOJ will hold next policy board meeting on Jan. 21 and 22, while the government will approve today stimulus measures worth some Y20 trillion. Meantime, the yen and dollar will both weaken against higher-yielding currencies after ECB President Mario Draghi said the region’s economy should gradually recover this year and data showed that imports in China rose at a faster-than-expected pace. he Standard & Poor’s 500 Index rose for a second straight day, up 0.76% and yields on Treasury’s 10-year notes gained four basis points to 1.90% on Thursday. On Thursday, the rate moved from Y87.86 to Y88.70, the highest since July 2010.
EasyForexNews Research Team