Asian session: The yen fell to the weakest level

The yen fell to the weakest level since March against the dollar on bets that Shinzo Abe’s Liberal Democratic Party will win Japanese elections this weekend and push the central bank to expand monetary easing. Abe, whose opposition LDP leads in opinion polls before the Dec. 16 ballot, has called for a doubling of the central bank’s inflation goal to 2 percent and unlimited easing to revive growth.

The Japanese currency headed for a weekly loss versus all of its 16 major counterparts as the Bank of Japan’s Tankan survey showed large manufacturers were the most pessimistic in almost three years. The BOJ’s Tankan index for large companies fell to minus 12 in December from minus 3 in September, a fifth-straight negative reading and the lowest since March 2010. A negative figure means pessimists outnumber optimists, and the median estimate of 25 economists surveyed by Bloomberg News was for minus 10.

The euro traded near a one-week high after the currency bloc’s finance ministers approved 49.1 billion-euro ($64.2 billion) of rescue payments to Greece yesterday. In Europe, finance ministers at a meeting in Brussels yesterday rubber stamped the next tranches of aid for Greece. Of the funds, 34.3 billion euros will be released within the next few days with the remaining money disbursed in the first quarter.

The Greek government this week said it plans to pay 11.29 billion euros to buy back 31.9 billion euros of bonds to reduce its debt burden and retain the support of the European Union and the International Monetary Fund. The buyback underscores a move away from the austerity-first measures European leaders have embraced since the financial crisis began in 2009.

EUR / USD: during the Asian session, the pair rose to yesterday's high.

GBP / USD: during the Asian session, the pair rose to $ 1.6120.

USD / JPY: during the Asian session, the pair rose to Y83.90.

The week draws to a close with a full calendar Friday, with the flash PMI indicators likely to be the stand out features. Ahead of those