SINGAPORE The yen went up on Monday after the Japanese government could revise a joint statement with the Bank of Japan BOJ over the latter's inflation target, possibly paving the way for a tweak in the BOJ's ultra-loose monetary policy.
The yen was a 0.34 per cent higher at 136.24 against the dollar, after having jumped more than 0.5 per cent to a high of 135.78 earlier in the session.
The Japanese government will revise a joint statement that it signed with the BOJ in 2013 that commits it to meeting a 2 per cent inflation target as soon as possible, sources told Reuters.
The revision would be made after a new BOJ governor is appointed in April, a move that may increase the chance of a tweak to incumbent governor Haruhiko Kuroda's ultra-loose monetary policy. The yen has plunged more than 15 per cent this year because of the policy stance and the resulting interest rate differentials with the rest of the world.
The upshot is that this may provide timely flexibility, but it doesn't bind monetary policy bias one way or another, said Vishnu Varathan, head of economics and strategy at Mizuho Bank.
At the end of the day, it doesn't necessarily have an immediate or an outsized impact on the yen, at least until clarity emerges on intent and execution. The dollar was lower in Asia trade, with sterling last 0.35 per cent higher at $1.2183 after falling 1 per cent last week, as investors bet that the Bank of England BoE might be close to the end of its rate-hike cycle.
The euro gained 0.18 per cent to $1.0603, while the Aussie rose 0.37 per cent to $0.6711.
The U.S. dollar index fell 0.19 per cent to 104.61.
A slew of central bank meetings last week saw the European Central Bank, the US Federal Reserve, and the BoE each raise rates by 50 basis points, with the Fed and the European Central Bank pledging more hikes ahead even though the risk of hurting growth.
S&P Global said on Friday that US business activity fell further in December as new orders fell to the lowest level in just over 2 -- 1 2 years.
In China, President Xi Jinping and his senior officials pledged to shore up the country's battered economy next year, as it grapples with a worsening spread of COVID 19 infections after abruptly ending many key tenets of its zero-COVID policy.
The Chinese offshore currency was last marginally lower at 6.9830 per dollar.
Carol Kong, a currency strategist at Commonwealth Bank of Australia, said that the pace of easing has just been too rapid.
If we see a further deterioration in the economic data, markets will probably rethink their optimistic outlook for the Chinese economy, as it will weaken and show the COVID-related disruptions in the near term.