Asian session: The yen held gains against all of its major peers

The yen held gains against all of its major peers after the Bank of Japan  maintained its 1 percent inflation goal after incoming Prime Minister Shinzo Abe called for a doubling of the target. Abe, poised to become the next prime minister, said this week he asked BOJ Governor Masaaki Shirakawa to agree to an accord with a 2 percent inflation target. Abe has called for unlimited easing by the central bank to end deflation and revive growth. Shirakawa is due to step down as BOJ governor in April. The Japanese currency snapped a three-day decline versus the dollar after the BOJ expanded its asset-purchase fund by 10 trillion yen ($118.8 billion) to 76 trillion yen and said it plans to examine its price goal at the next meeting.

The dollar held onto a rally from eight-month low versus the euro amid concern that U.S. lawmakers are failing to make progress in budget talks, boosting demand for refuge assets. Officials in President Barack Obama’s administration told leaders of business and financial services groups that negotiations with Boehner deteriorated in the last 24 hours, a person familiar with the meeting said. The officials said that Republican plans to push forward with Boehner’s alternative proposal on taxes and spending risks pushing the government past the deadline when automatic spending cuts and tax increases kick in, said the person, who asked for anonymity to discuss the private talks.

EUR/USD: during the Asian session the pair fell to $ 1.3185.

GBP/USD: during the Asian session, the pair traded in the range of $ 1.6235-60.

USD/JPY: during the Asian session the pair fell to Y83.85.

Germany starts European data for Thursday with the 0700GMT release of PPI, which is expected to come in at -0.1% m/m for November, 1.3% y/y. UK data sees Retail Sales for November at 0930GMT, which are expected to come in at 0.3% m/m, 2.2% y/y ex-fuel and 0.3% m/m, 1.4% y/y for the Totalfigure. US data starts at 1330GMT, when the level of initial claims is expected to rise 15,000 to 358,000 in the December 15 employment survey week after falling 29,000 in the previous week. US data continues with a sloew of data at 1500GMT when the pace of existing home sales is expected to rise to a 4.89 million annual rate in November after rising in October.