The Japanese yen gained on Wednesday after the Bank of Japan held policy steady and upgraded its assessment of exports and factory output, with Asian markets gearing up for the Chinese New Year holidays. Greece is still in focus.
USD/JPY traded at 119.15, down 0.09%, while AUD/USD changed hands at 0.7824, up 0.08%. EUR/USD was down 0.05% at 1.1405.
On Wednesday the Bank of Japan board decided not to change the bank's policy target and upgraded its assessment of exports and factory output, while warning consumption has been hit by a April 2014 sales tax hike.
However, board member Takahide Kiuchi continued to propose the BoJ should maintain the high degree of easing only during the two-year period from April 2013 so that it is not overdone. But his proposal was again voted down by the rest of the board.
In Australia the January Westpac-MI Leading Index rose 0.08 point to 98.0, staying on a path of below trend growth.
Holidays
Wednesday also marks the start of the Chinese New Year holidays. Markets in mainland China are already closed until Feb 25. Markets in Hong Kong will observe a shortened session today before holidays for the next two days.
Elsewhere in Asia, many regional markets will be closed from Thursday, and are due to re-open Feb. 23, although trading desks are due to be lightly staffed.
Dollar
Overnight, the dollar trimmed earlier losses against the other major currencies on Tuesday, but the greenback remained under pressure as downbeat manufacturing data from the New York area added to concerns over the strength of the U.S. economic recovery.
In a report, the Federal Reserve Bank of New York said that its general business conditions index decreased to 7.8 this month from a reading of 10.0 in January. Analysts had expected the index to dip to 8.5 in February.
Separately, the National Association of Home Builders said its Housing Market Index decreased to a four-month low of 55.0 this month from 57.0 in January. Analysts expected the index to rise to 58.0 in February.
Euro
The euro found support overnight after the ZEW Centre for Economic Research said that its index of German economic sentiment rose by 4.6 points to 53.0 this month from January’s reading of 48.4. It was the highest reading since February 2014, but was still below expectations of 55.0.
However, investors remained cautious as Greece’s current €240 billion bailout is due to expire at the end of the month and the new Greek government does not want it extended. Athens rejected a proposed six-month extension of the bailout on Monday, calling it "unacceptable".
Greece has until Friday to request an extension otherwise its bailout will expire on February 28 and the country will run out of money.
The standoff
between Greece and its creditors has sparked fears that it could lead
the country exit the euro zone.
The European Central Bank was to decide whether to suspend emergency financial support for Greece later in the day.
