Yen Gains Momentum Ahead of Key Decisions By BoJ

The yen held stronger Friday ahead of a central bank review on rates and subsequent outlook for the economy.

USD/JPY traded at 120.93, down 0.17%, after the household data and consumer prices and unemployment. AUD/USD changed hands at 0.7099, up 0.36%.

In Japan, September household spending plunged 1.3% month-on-month, well below the 0.3% gain seen, national core CPI eased 0.1%, less than the 0.2% drop expected, and unemployment stayed steady at 3.4% as expected.

Consumer spending remains lackluster despite a gradual pickup in nominal wages and possibly due to the uncertainty over global growth and stock markets.

Investors are now looking at the Bank of Japan one-day policy meeting on Friday as industrial output shows signs of life even as the central bank is expected to revise down growth and inflation forecasts in its semi-annual Outlook Report due the same day.

Expectations of further eased have ebbed and waned for another round of aggressive monetary easing to boost prices more than two years into a massive stimulus program of ¥80 trillion.

In Australia comes housing credit for September rose 0.8%, a faster pace that the 0.5% gain in August, while housing credit was up 0.6%, unchanged from the previous month. Producer prices gained 0.9% in the third quarter.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.08% to 97.29.

Overnight, the dollar pushed lower against the other major currencies on Thursday, after the release of disappointing U.S. data dampened optimism over the strength of the economy.

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