Asian session: The yen rallied from its weakest level in 2 1/2 years

00:01 United Kingdom Rightmove House Price Index (MoM) January -3.3% +0.2%

00:01 United Kingdom Rightmove House Price Index (YoY) January +1.4% +2.4%

The yen rallied from its weakest level in 2 1/2 years as Bank of Japan officials began a two-day policy meeting. All 23 economists in a Bloomberg News survey expect the BOJ to expand its asset purchases, with the median estimate signaling a 10 trillion yen ($112 billion) increase. Abe has announced a spending package of similar size and is calling on the central bank to double it’s 1 percent target for consumer price gains to defeat entrenched deflation. The yen has lost 5.9 percent against the dollar in the past month on speculation that the BOJ, under pressure from the government of new Prime Minister Shinzo Abe, will boost stimulus to lift the economy out of its third recession since 2008. Technical indicators signaled the yen’s decline may have been overdone, while traders became the least bearish on the currency in eight weeks. The yen’s 14-day relative strength index against the dollar was at 26 on Jan. 18, below the 30 level that traders see as a signal an asset’s price has fallen too far, too fast and may be due to reverse course. Versus the euro, it was at 29.

The Dollar Index traded near a one-week high before reports that may show gains in U.S. home sales. In the U.S., sales of existing homes probably climbed 1.2 percent to a 5.1 million annual rate last month, the strongest since November 2009, according to the median estimate of economists polled by Bloomberg before the National Association of Realtors publishes the figures tomorrow. Another report this week may say new-home sales picked up to a 385,000 annual pace for the month, the best showing since April 2010.

EUR / USD: during the Asian session, the pair traded in a range of $1.3300/30.

GBP / USD: during the Asian session, the pair traded in a range of $1.5840/70.

USD / JPY: during the Asian session the pair fell to Y89.40.

In Europe, the Eurogroup is set to meet, with the formal agreement to OK the latest Greek disbursement on the agenda. European data gets underway at 0700GMT, with the release of Germany's December PPI numbers. The UK data calendar gets underway at 0930GMT, with the release of the Bank of England January Trends in Lending and Capital Issuance data, along with the December CML Mortgage Lending numbers. Further EU data is expected at 1000GMT, with the release of the third quarter 2012 government debt statistics.