Investing.com - The U.S. dollar gave back some of last week's
impressive performance against the Japanese yen in Monday's Asian
session, but USD/JPY was mostly steady as traders seem to be
expecting further easing from the Bank of Japan.
In Asian trading Monday, USD/JPY fell 0.03% to 88.13 after trading
as high as 88.38. The pair was likely to find support at 86.54,
Wednesday's low, and resistance at 88.40, Friday's high. Last week,
the dollar gained 2.7% against the yen, propelling USD/JPY to its
highest levels in two-and-a-half years.
Elsewhere, Japan's monetary base rose more-than-expected last
month, official data showed on Sunday.
In a report, Bank of Japan said that Japan's Monetary Base rose to
11.8%, from 5.0% in the preceding month.
Analysts had expected Japan's Monetary Base to rise to 5.3% last
month. The monetary base is closely linked to interest rates
although Japan's interest have hardly any room to move lower.
Expectations look firm that Prime Minister Shinzo Abe and his
Liberal Democratic Party will continue pushing the Bank of Japan to
engage in unlimited monetary easing to suppress the yen. Those
expectations have buoyed Japanese equities in recent weeks with
some trades saying USD/JPY could rise to 100 later this year.
Later this week, Japan is scheduled to release official data on the
current account, which is directly linked to currency demand.
After this week, the marquee near-term event for USD/JPY is the BoJ
policy meeting on January 22. It is widely expected that the
central bank will adopt Abe's inflation target of 2%. BoJ's current
inflation target is just 1%, but Abe has threatened to revoke BoJ's
independence if the bank does not fall in line with his easing and
Elsewhere, EUR/JPY fell 0.05% to 115.16 while AUD/JPY added 0.02%
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