The yen rose against most of its major peers before the Bank of Japan (8301) starts a two-day meeting tomorrow as investors weighed whether it will follow the Federal Reserve in expanding monetary easing.
The euro snapped a four-day advance versus the yen before a German report tomorrow that may show investor confidence remains weak in the regionâ€™s biggest economy. Australiaâ€™s dollar, known as the Aussie, dropped as territorial and trade disputes involving China damped risk appetite among investors.
â€œWhat the Fed has done increases the pressure that was already evident on the Bank of Japan politically to take further action against yen strength,â€ said Ray Attrill, global co-head of foreign- exchange strategy at National Australia Bank Ltd. in Sydney. If the BOJ meeting â€œpasses off without any new policy initiatives on Wednesday, then I would expect to see dollar-yen probably back down to the lows that we saw last week.â€