CHFJPY Swiss Franc vs Japanese Yen

The Japanese yen climbed against its major counterparts in early European trading on Thursday, reversing early losses, amid media reports that the Bank of Japan may hold off implementing additional easing measures at its meeting next week.

Some BoJ officials are of the opinion that delay in attaining the BoJ's inflationary goal wouldn't warrant immediate easing, as a tighter labor market eventually boost wages and feed into consumer prices, Reuters news agency reported.

Although the BoJ is likely to downgrade its assessment that underlying trend inflation is "improving steadily next week, there's no consensus among the policy makers on whether that warrants prompt action, it reported.

Caution ahead of the European Central Bank's monetary policy decision, due shortly, also boosted the safe-haven currency.

The central bank is widely expected to leave its monetary policy unchanged, but investors are watching for signs of future easing in the post-Brexit era.

In economic front, data from the Ministry of Economy, Trade and Industry showed that Japan's all industry activity dropped for the first time in three months in May.

The all industry activity index slid 1 percent month-on-month in May, reversing a 0.8 percent rise in April. This was the first increase in three months but slightly slower than the expected drop of 1.1 percent.

The yen was weaker in the previous session, weighed by hopes for more easing by the Bank of Japan at its policy meeting next week.

Bouncing off from an early 6-day low of 142.39 against the pound, the yen edged up to 139.08. If the yen gains further, it may find resistance around the 136.00 zone.

Data from the Office for National Statistics showed that British retail sales declined more than expected in June.

Retail sales volume including auto fuel fell 0.9 percent month-on-month in June, offsetting a 0.9 percent rise in May. This was the biggest fall seen so far this year and larger than the expected fall of 0.6 percent.

The yen advanced to a 3-day high of 105.54 against the greenback, following a decline to near 1-1/2-month low of 107.49 in the previous session. The next possible resistance for the yen may be found around the 104.00 area.

The Japanese currency spiked up to 6-day highs of 116.19 against the euro and 106.84 against the franc, off its early near 4-week lows of 118.46 and 108.94, respectively. On the upside, the yen may find resistance around 113.00 against the euro and 104.00 against the franc.

The yen strengthened to a 10-day high of 73.76 versus the kiwi, weekly high of 79.05 against the aussie and a 6-day high of 80.76 against the loonie, reversing from an early low of 75.07, 2-day low of 80.46 and a 6-day low of 82.28, respectively. The yen is seen finding resistance around 72.00 against the kiwi, 76.00 against the aussie and 77.5 against the loonie.

Looking ahead, the European Central Bank will announce its interest rate decision at 7:45 am ET. Economists expect the bank to retain its key refi rate at 0.00 percent.

Following the announcement, President Mario Draghi will hold the customary post-meeting press conference.

In the New York session, Canada wholesale sales data for May, U.S. weekly jobless claims for the week ended July 16, U.S. FHFA house price index for May, U.S. existing home sales data for June, leading indicator for June and Philadelphia Fed manufacturing index for July are set to be published.

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