Asian session: The yen rallied from near its weakest level

The yen rallied from near its weakest level in almost seven months as the Bank of Japan refrained from boosting stimulus measures at the conclusion of a two-day meeting today. The BOJ said today it would keep its asset-purchase fund at 66 trillion yen ($812 billion) and a credit-lending facility at 25 trillion yen. The Japanese currency rose versus most of its 16 major counterparts as BOJ Governor Masaaki Shirakawa and his board kept policy unchanged amid calls for unlimited easing by opposition leader Shinzo Abe, who polls indicate may become prime minister following elections next month.

The euro weakened against its peers after Moody’s Investors Service stripped France of its top government bond rating, renewing concern that Europe’s debt crisis will deepen. Moody’s cut France by one grade to Aa1 and said its outlook remains negative. “France’s fiscal outlook is uncertain as a result of its deteriorating economic prospects,” the ratings company said in a statement dated yesterday. Moody’s downgrade of the nation follows similar action by Standard & Poor’s in January.

Since S&P’s downgrade, French government bonds have gained 9.4 percent, compared with 3.4 percent for German debt, and 2.5 percent for that of the U.S., according to Bank of America Merrill Lynch data.

Finance officials from France, Germany, Italy and Spain convened yesterday in Paris to forge a common position on Greece’s next aid payment before a gathering with the rest of their euro-area counterparts today, according to a European aide. Lengthening maturities on Greek debt and lowering rates on the country’s bailout loans are the main options being discussed to plug a funding gap, said the official, who declined to be named because the talks aren’t public.

EUR/USD: during the Asian session the pair fell to $1.2765, but recovered later.

GBP/USD: during the Asian session, the pair rose to yesterday's highs.

USD/JPY: during the Asian session the pair fell to yesterday's lows.

There is a full calendar on both sides of the Atlantic Tuesday, with the Eurogroup meeting of EZ finance ministers likely to dominate proceedings later in the day. The meeting is primarily to discuss the disbursement of the next tranche of Greek aid. However, France will probably be mentioned in dispatches following the overnight downgrade by Moody's. European data gets underway at 0700GMT, with the release of the German October PPI data. At 0900GMT, German Finance Minister Wolfgang Schaeuble gives his budget speech in the Bundestag.