Asian session: The yen weakened to 94 per dollar

00:00 New Zealand Bank holiday -

00:30 Australia Retail sales (MoM) December -0.1% +0.3% -0.2%

The yen weakened to 94 per dollar for the first time since May 2010 on speculation Japan’s government will hasten the selection of a new central bank chief to take further steps to end deflation. Japan’s Prime Minister Shinzo Abe will present his candidate for the next BOJ governor to opposition parties after a visit to the U.S. this month, public broadcaster NHK reported today, without saying where it got the information.

Japan’s currency added to yesterday’s biggest drop versus the euro in more than a week after Bank of Japan Governor Masaaki Shirakawa said he will step down on March 19, almost three weeks before his term is due to end.

Demand for the 17- nation euro was supported on prospects the European Central Bank will refrain from easing monetary policy tomorrow. In Europe, the ECB, which has held its main refinancing rate at 0.75 percent since July, will probably make no change at tomorrow’s policy meeting, according to all 60 economists surveyed by Bloomberg News.

Government data due today are forecast to show German factory orders rose 0.7 percent in December from November, when they dropped 1.8 percent, according to the median estimate of economists in a Bloomberg News poll.

The Australian dollar slid after data showed the nation’s retail sales unexpectedly fell in December. Retail sales in Australia fell 0.2 percent in December from the previous month, when they dropped a revised 0.2 percent, the Bureau of Statistics said in Sydney today. The median forecast in a Bloomberg survey of economists for a 0.3 percent gain.

EUR/USD: during the Asian session, the pair traded in the range of $1.3570-95.

GBP/USD: during the Asian session, the pair traded in the range of $1.5650-65.

USD/JPY: during the Asian session, the pair rose above Y94.00.

There is a very limited calendar on both sides of the Atlantic Wednesday. The European calendar kicks off at 0745GMT, with the release of the French PPI data for December. At 0900GMT, the SMMT January car registration data will be released. At 1100GMT, the German December manufacturing orders data will cross the wires. Factory orders are seen up 0.7% m/m and down 1.7% on year. Germany re-opens its 5-year benchmark 0.50% Feb 2018 Bobl for up to E4.0bln. There is only limited UK data, starting with the release of the Halifax house price index data for January. Traders are looking for a further uptick, underlining recent improvements seen in other indices. Expectations are for a rise of 0.1% on month and 1.6% on a 3 mo y/y basis. At 0900GMT, the SMMT January car registration data will be released.