Yen Trades Lower Ahead Of BOJ Meeting

(RTTNews) - The Japanese yen traded lower against other major currencies in early Asian deals on Monday ahead of the Bank of Japan's two day monetary policy meeting starting today.

The central bank is not expected to announce easing measures at the end of meeting following an increase in asset purchases by 11 trillion yen at last meeting on October 30.

Japan is going for general elections on December 16 and speculation intensified that opposition party that supported aggressive monetary easing will defeat the ruling party.

Last week, leader of the opposition Liberal Democratic party, Shinzo Abe, proposed "unlimited" monetary easing for fighting Japan's deflation and also set an inflation target of 2 to 3 per cent.

The yen depreciated last week following Japan Prime Minster Yoshihiko Noda's call for general elections next month. The ruling Democratic party dissolved the lower house of parliament on Friday to smoothen political process for general election

The yen hit a multi-month low of 81.60 against the greenback with 82.00 seen as the next support level. At Friday's close, the pair was worth 81.31.

Against the euro, the yen fell to 104.12, its lowest level since October 25. If the yen declines further, it may break 104.5 level.

The yen dipped to 129.75 against the pound for the first time since May 4. The yen is likely to seek next support level at 130.5.

The average asking price for a home in the United Kingdom was down 2.6 percent on month in November, property tracking website Rightmove said today, after climbing 3.5 percent in October.

On a yearly basis, asking prices climbed 2.0 percent after collecting 1.5 percent in the previous month.

The yen that closed last week's deals at 84.15 against the aussie and 81.25 against the loonie declined to near a 7-month low of 84.54 and a 6-1/2-month low of 81.59, respectively. The yen may seek next support level at 85.00 against the aussie and 82.00 against the loonie.

The yen declined to near a 2-week low of 66.37 against the NZ dollar with 66.5 seen as the next downside target level. The pair finished Friday's deals at 66.06.

The price of purchasing new capital items rose 0.3 percent in the third quarter of 2012 compared with the previous three months, Statistics New Zealand said today.

Among the individual components of the capital goods price index, residential buildings prices added 0.8 percent, while civil construction was up 1.0 percent and transport equipment was up 0.6 percent.

Against the Swiss franc, the yen reached a 4-day low of 86.43 from Friday's close of 86.00. The next support level for the yen is seen at 87.00.

Eurozone construction output for September is due in the European session.

From the U.S., existing home sales for October and NAHB housing market index for November are expected in the American session.

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