Forex Asia Review – Yen weakens ahead of BOJ policy meeting; euro breaks above $1.28

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Euro rose against the dollar to move further away from a four-month low.  The single currency was due for a correction after a long declining streak and it remains vulnerable to headline news from Europe and any developments in Greece and Spain.

Markets are still concerned about a possible Greece exit from the euro zone and contagion to the rest of the region. Greece holds fresh elections on June 17. The G8 Summit over the weekend offered no specific solutions to the Europe debt crisis although world leaders pledged for Greece to stay in the monetary union and called for Europe to balance austerity with growth.

EURUSD opened in Asia at 1.2763, moving off a four-month low of 1.2641, hitting a high of 1.2811. EURGBP hit a high of 0.8088, clawing back losses made all last week.

The yen trimmed its gains from last week against the dollar and euro ahead of Bank of Japan policy meeting starting tomorrow.  Speculation is growing that the BOJ will add to stimulus measures this week to support growth and curb yen strength. USDJPY moved off a three-month 78.98 reached on Friday and climbed to 79.23 in the Asian session. EURJPY opened in Asia at 100.95, also bouncing off a three-month low to rise to 101.40.

The Australian dollar stabilized after falling on Friday to the lowest level since November. AUDUSD is steady within a range since then, trading between 0.9793 and 0.9874, hovering in the upper range in the Asian session today.

In other currencies, GBPUSD has been consolidating since Friday, moving off  two-month lows to open in Asia at 1.5796 and hitting high of 1.5837.

USDCHF extended its drop from Friday’s four-month high of 0.9499 to reach a low of 0.9373.