EURJPY Euro vs Japanese Yen

The Japanese yen drifted lower against its major rivals in European deals on Monday, as sentiment lifted up on hopes that Chinese authorities would pursue more monetary easing to bolster economic growth.

People's Bank of China Governor Zhou Xiaochuan signaled over the weekend that China has ample room to ease policy if inflation continues to fall. His comments spurred hopes for immediate action by Beijing to boost the economy amid growing deflationary risks.

Investors continued to monitor developments in Greece, where its government is continuing talks with creditors to reach a reform agreement before it runs out of money. Athens is set to present a list of economic reform proposals to international creditors today after Tsipras's earlier reform plans met resistance from EU leaders.

Data from the Ministry of Economy, Trade and Industry showed that Japan's industrial output fell 3.4 percent on month in February. The contraction was for the first time in three months.

The headline figure missed forecasts for a decline of 1.9 percent following the 3.7 percent increase in January.

The yen showed mixed trading in the Asian session. While the yen was steady against the franc and the greenback, it advanced against the euro and the pound.

The yen hit 5-day lows of 119.80 against the greenback and 177.95 against the pound, off early high of 119.10 and a 4-day high of 176.67, respectively. The next possible support for the yen is seen around 120.00 against the greenback and 179.00 against the pound.

The yen slipped to 94.93 against the loonie, 130.15 against the euro and 124.30 against the franc, reversing from early highs of 94.40, 129.29 and 123.46, respectively. If the yen continues decline, it is likely to support around 96.00 against the loonie, 131.00 against the euro and 125.00 against the franc.

The yen that climbed to a 10-day high of 89.70 against the kiwi in early deals edged down to 90.22. Next likely support for the yen may be located around against the 92.5 mark.

Looking ahead, preliminary German consumer price index for March, Canada industrial product price and raw materials price index - both for February and U.S. personal income and spending data and pending home sales data for February are slated for release in the New York session.

At 9:00 am ET, European Union's financial affairs chief Pierre Moscovici is expected to speak to the EU parliament committee in Brussels.

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