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Asian Session – Euro keeps bid on hopes for Greece deal, yen flat on disappointing GDP

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japan-flag-28572-29292-hd-wallpapersThe euro managed to remain above the 1.14 level during most of today’s Asian trading, as there was optimism about a deal between Greece and its creditors.  Still, most market participants did not expect a breakthrough or a deal to be struck during today’s meeting of Eurozone finance ministers, but at least some signs of progress to appear.  Greece stated it was confident it would reach a deal but such a deal would have to reverse some of the harsh austerity measures included in the memorandum.

In the session’s main economic news, Japanese economic growth for the fourth quarter missed expectations by coming in at 0.6% quarter-on-quarter compared with the expectation of a 0.9% rate of expansion.  Still, for Japanese policymakers, it was a relief that the country exited its recession.  It is unclear whether the data had any implications for monetary policy.  In a positive aspect of the data, the GDP deflator handily beat expectations by coming in at +2.3% year-on-year compared to expectations of a 1.9% increase.

Dollar / yen traded around 118.65 – roughly the level at which it closed during the previous week.  Speculative conviction that the yen would drop has waned in recent weeks as the Bank of Japan has refrained from signaling it was considering additional monetary stimulus.

Looking ahead, President’s day holiday in the United States means there will not be any data releases during the US session and trading is likely to be light.  The Eurogroup meeting is expected to begin at 1630 GMT.  China and other Asian countries will go on holiday as of Wednesday this week, because of the Lunar holiday.

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