Asian session: Yen falls on prospects Japan to intervene

Data released:
03:30     Australia     RBA meeting announcement    4.75%    4.75%    4.75%

The yen fell amid speculations Japan will intervene in currency markets.
The yen dropped against the euro for the first time in five days after Japanese Finance Minister Yoshihiko Noda said the nation’s currency is overvalued and he’s watching markets closely.
The Nikkei newspaper reported that Japanese officials are concerned that the yen’s strength will hurt domestic companies and undermine the nation’s recovery from the March 11 earthquake and tsunami. Noda declined to comment on possible currency intervention today.
Bank of Japan officials in the past week have voiced more concern about the currency, with board member Hidetoshi Kamezaki saying the central bank would need to act “proactively” should the yen’s gains pose a threat to growth and prices. The BOJ is set to meet on policy this week.
Japan last intervened on March 18, joining Group of Seven counterparts in selling the yen a day after it jumped to a record against the dollar.
“BOJ intervention in the past has only slowed the pace of JPY appreciation,” BNP Paribas SA analysts wrote yesterday. “If the BOJ does intervene the result may be the same.”
Demand for the dollar was limited on concern an agreement between President Barack Obama and Congressional leaders on raising the debt ceiling and spending cuts will weigh on growth in the world’s biggest economy. The House approved legislation to raise the U.S. debt limit by at least $2.1 trillion and cut federal spending by $2.4 trillion or more. The measure goes to the Senate for a final vote planned today.

EUR/USD continued to weaken from $1.4280 and printed session lows around $1.4150.
GBP/USD also fell from $1.6330 to $1.6260.
USD/JPY tested Y77.15 before recovered to Y77.36.

US personal income/spending are scheduled to release at 12:30 GMT.