Forex Asia Review – Yen strengthens after Bank of Japan holds off policy easing

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Euro extended its advance against the dollar during the Asian session, lifted by positive news that major central banks of G20 nations will help boost liquidity if required after the Greek elections on Sunday. This calmed fears of a credit squeeze happening after the Greek vote in case the outcome is such that creates further turmoil in the markets. Recently there have been concerns that Greece might exit the euro if political parties opposing the Greek bailout and austerity measures, win the elections.

EURUSD rose to a high of 1.2645 during Asian trading, so far gaining back most losses made during this week.

 

Sterling paused its advance against the dollar in the Asian session after Bank of England governor Mervyn King said that the BOE will step up measures to lend to banks cheaply for 3 to 4 years as a means to stimulate the UK  economy. This raised speculation of a new round of easing.  GBPUSD stabilized at 1.5537.

 

Yen strengthened against most of its major counterparts after the Bank of Japan refrained from expanding monetary stimulus after its policy meeting today. It kept its asset-purchase program unchanged at 40 trillion yen. If the BOJ eased policy, this would have been negative for the yen. USDJPY fell further to 78.81 from an early session high of 79.49. EURJPY dropped to 99.63 from 100.34.

 

The Australian dollar remained at parity against the U.S. dollar. Higher commodity prices and better risk appetite helped lift the aussie. Meanwhile the greenback is weaker after  data yesterday showed new claims for U.S. jobless benefits rose for the fifth time in six weeks. This raised speculation that the US Fed will add to stimulus measures by introducing more quantitative easing. AUDUSD climbed to 1.0028.