Asian session: The yen headed

00:01United Kingdom BRC Retail Sales Monitor y/yDecember +0.4%+0.7%+0.3%

00:30Australia Trade BalanceNovember -2.09-2.21-2.64

The yen headed for its biggest two- day gain since November, extending a rally from its 2 1/2 year low on speculation recent declines were excessive.

The currency strengthened against all of its 16 major counterparts even amid prospects Japanese Prime Minister Shinzo Abe will press the central bank to expand monetary stimulus at a Jan. 21-22 meeting in an effort to revive growth. The yen’s 14-day relative strength index against the dollar was at 25 today, below the 30 level that some traders view as a signal that an asset’s price has fallen too fast. The similar gauge for the yen versus the euro was at 30.

The euro maintained two days of gains versus the dollar amid speculation the European Central Bank will refrain from cutting borrowing costs this week. The ECB meets Jan. 10 and will keep its main refinancing rate at a record low of 0.75 percent, according to the median estimate of 55 economists in a Bloomberg News survey.

Data today may show the euro-area jobless rate rose to 11.8 percent in November from 11.7 percent in October, according to the median estimate of economists in a Bloomberg News poll. That would be the highest since the currency bloc was formed.

Australia’s dollar weakened against all of its 16 most- traded peers after the nation’s statistics office said imports outpaced exports by A$2.64 billion ($2.77 billion) in November. That compared with a revised A$2.44 billion shortfall in October and was the biggest deficit since March 2008.

EUR / USD: during the Asian session, the pair rose to $1.3140.

GBP / USD: during the Asian session, the pair traded in the range of $1.6100-30.

USD / JPY: during the Asian session the pair fell to Y87.20.

One of the highlights today sees German Chancellor Angela Merkel, Greek Prime Minister Antonis Samaras and Spanish Finance Minister Luis de Guindos take part in conference hosted by Die Welt, in Berlin. Merkel is also due to hold bilateral talks with the Greek PM. There is a raft of EMU data due for release at 1000GMT, including November retail trade, December economic sentiment numbers, December business climate indicator and the November unemployment rate. At 1100GMT, German November manufacturing orders will cross the screens, with consensus forecasts looking for a fall of 1.4% m/m.