Asian session: The euro rose to its highest level in two months

05:00 Japan BoJ monthly economic report February

The euro rose to its highest level in two months against the yen after the People’s Bank of China said the nation will participate in resolving Europe’s debt crisis, boosting demand for higher-yielding assets. The 17-nation euro also gained against the dollar after PBOC Governor Zhou Xiaochuan said China can provide help via avenues including the central bank and its sovereign wealth fund.

Gains in the euro were limited before European finance ministers discuss a second bailout for Greece in a teleconference scheduled after they canceled a meeting planned for today. Finance ministers will meet on Feb. 20, Luxembourg Prime Minister Jean-Claude Juncker said yesterday.

The leaders of Greece’s two biggest political parties, New Democracy’s Antonis Samaras and Pasok’s George Papandreou, will send written commitments today to the so-called troika to stand by austerity measures, a government official said. The assurance to the troika -- the International Monetary Fund, European Commission and European Central Bank -- was a condition of international aid.

The yen dropped versus all of its major peers after new easing steps by the Bank of Japan yesterday added to signs officials are acting to protect the domestic economy from currency strength.

The dollar declined as Asian stocks rose.

EUR/USD: during the Asian session the pair gain, corrected after yesterday's falling.

GBP/USD: during the Asian session the pair gain fixed above $1.5700.

USD/JPY: during the Asian session the pair gain, updated new week’s high.

Another heavy calendar on Wednesday, European growth data continues at 0700GMT, with the release of German Q4 data. UK labour data is expected at 0930 GMT. The Markit reports for REC/KPMG showed some growth in both temporary/contract work and permanent placements in December followed by a marked acceleration in jobs growth in January. This tallies with the pick-up in the activity data. The three-monthly ILO data will still show a marked rise in unemployment, as the outturn for the first two months is known (bar revisions), but claimant count jobless is expected to show another minimal rise and the data overall should provide evidence the deterioration in the labour market is easing. At 1030GMT, the BOE releases its Quarterly Inflation report.