Forex Asia Review – Bank of Japan keeps policy unchanged; yen gains

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USDJPY continued to trade sideways most of the Asian trading session until the Bank of Japan policy meeting.  The pair was supported above 82.10 until late in the session when the BOJ announced it kept its asset-purchase program unchanged. This led yen to make some gains against the dollar, as USDJPY fell to 81.95. Yen also gained against the euro, with EURJPY falling to 107.87 from 108.65.

EURUSD continued to tracked higher during the Asian trading session on improving global risk appetite. Investors began unwinding anti-euro bets which helped the single currency edge up against the dollar.  Concerns over the Greek debt crisis appear to have faded especially after Monday’s Eurogroup meeting, where plans were being put in place for Greece to receive its second bailout as earlier than originally planned. EURUSD hit a session high of 1.3190, well off the lows of 1.3077 reached in Asian hours on Monday.

Improving market sentiment led the dollar to ease against its major counterparts. This was evident in the ICE Dollar Index, which tracks the greenback against a basket of currencies, which fell to 78.89 from 80.041.

The Australian dollar made up for losses made against its US counterpart. Yesterday the aussie declined after disappointing trade data out of China over the weekend. The Australian dollar often strongly reflects investor sentiment toward China because Australia is a major exporter of raw materials to China. AUDUSD opened in Asia at 1.0509 and edged up to 1.0560.

The New Zealand dollar halted two days of losses after the Real Estate Institute of New Zealand index of house prices rose 0.8 percent to 3,280.5 last month, up from the previous decline of 1.4 percent. NZDUSD climbed to 0.8234, up from Monday’s low of 0.8136.

Looking ahead, the US Federal Reserve is wrapping up a policy meeting today. Markets will focus on whether the Fed will undertake another round of bond buying.