The Japanese Yen got off last week's lows at the start of the trading week, as investors looked beyond the Bank of Japan's expected easing steps and instead focused on US economic factors.
The Yen continued to advance against the Euro earlier today, ahead of key reports that are due out on Tuesday.
Data is expected to show that Spain's gross domestic product has shrunk by around 0.4% last quarter and that Germany's jobless rate has risen 6.9% in October from September, its highest level in more than three years.
Other data due out on Friday, could also show that U.S. unemployment has climbed in October. I expect that the U.S. jobless rate will have climbed to around 7.9% for the month.
With especially the Euro region's economy being as bad as it is and with no sign of picking up, I expect there to be appreciation pressure on the Yen for the moment.
The markets will shift their attention onto the Bank of Japan (BOJ) which is scheduled to meet on Tuesday. Expectations are high for an announcement to confirm any easing policy.
Government data had last week shown, that consumer prices had fallen for a fifth consecutive month. This has made the central bank's 1% inflation target elusive.
As a result, the BOJ board members are now facing political pressure to ease policy and I expect that we could see officials boosting asset purchases on Tuesday. Should that occur, I then expect that the Yen may momentarily weaken.
Earlier today, the Yen was at 79.74 per U.S. Dollar and at 103.08 per Euro.
Meanwhile, investors still await Spain's request for a bailout, which would kick-start the European Central Bank bond-buying programme and could force the Euro out of its recent range
Now European policy makers are anxious for the release of a report on Greece's progress in meeting internationally agreed targets. These targets were compiled by the troika of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF).
The Euro was down by 0.1% to $1.2927 earlier today.
From the U.S comes news that the New York Stock Exchange and New York Mercantile Exchange have cancelled floor trading for the day. The Securities Industry and Financial Markets Association had suggested that trading end at noon New York time today, because of imminent Hurricane Sandy