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Asian Session – Yen gains as Bank of Japan keeps policy steady

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The yen put in a strong performance during today’s Asian trading – driving dollar / yen below the 120 level and euro / yen under the 130 mark, as the Bank of Japan decided to keep its massive stimulus program unchanged. Dollar / yen was at 119.85 and euro / yen was last quoted at 130.06.

Interestingly, yen strength was coupled with a strong performance by the Japanese Nikkei 225 stock index, which climbed to its highest in 15 years and was increasingly eyeing the psychological 20,000 mark. Usually the yen and the Nikkei are inversely related.

The dollar was also off its best levels against the euro, following a powerful rally the previous day which drove the euro down from 1.0950 to around 1.08, where the pair found some support. Euro / dollar was last trading at 1.0851. German industrial orders for February dropped 0.9% month-on-month, instead of increasing 1.5% as economists expected.

The US dollar was strong the previous day as the market chose to look past Friday’s weak March employment report and investors decided that the currency’s uptrend was still justified by the relative fundamentals.

Looking ahead to the remainder of the day, no major data is expected. Swiss inflation for March is expected to show that the country remains deep in deflation, while Eurozone retail sales for February are expected to fall 0.2% month-on-month and be up 3.0% year-on-year. Later during the US session, Fed Governor Jerome Powell will be speaking on monetary policy, while the minutes of the March Federal Open Market Committee (FOMC) meeting will be key to watch for what the Fed’s main concerns are right now.

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