Asian session: The yen declined

The yen declined versus its peers after incoming Japanese prime minister Shinzo Abe said he will consider changing the law governing the central bank unless it boosts its inflation target to 2 percent next month. Abe said on Fuji Television yesterday that he will consider revising the central bank law if the Bank of Japan (8301) fails to increase its inflation target from 1 percent at its January meeting. He is poised to become prime minister after his Liberal Democratic Party’s coalition secured a majority in elections on Dec. 16.

The greenback remained stronger versus the euro amid concern U.S. lawmakers will fail to avert the so-called fiscal cliff of tax increases and spending cuts, supporting demand for haven assets. In Washington, political leaders are debating how to avoid the fiscal cliff: more than $600 billion in automatic tax increases and spending cuts that will take effect in January unless Congress acts. House Republican leaders canceled a vote on Speaker John Boehner’s plan to allow higher tax rates for annual income above $1 million last week, sending stocks prices lower. Boehner, an Ohio Republican, said in a statement on Dec. 20 that his tax measure -- which he called “Plan B” -- “did not have sufficient support from our members to pass.”

EUR/USD: during the Asian session, the pair traded in the range of $ 1.3170-85.

GBP/USD: during the Asian session, the pair traded in the range of $ 1.6140-70.

USD/JPY: during the Asian session, the pair traded in the range of Y84.30-50.

The calendar for Monday is extremely quiet. Japanese markets remain closed for the Emperor's Birthday holiday, but in terms of the volume economic data releases they are still up there with the UK and euro zone who both also have empty calendars.