Asian session: The yen sank to an almost three-year low

00:01 China HSBC Manufacturing PMI February 52.3 52.2 50.4

The yen sank to an almost three-year low as Japan’s government narrowed down candidates to run the central bank and pursue the prime minister’s plan for expanded monetary stimulus. The Asian currency declined against all its major peers as Prime Minister Shinzo Abe was said to be very likely to nominate Asian Development Bank President Haruhiko Kuroda for Bank of Japan governor. Abe is also likely to tap Kikuo Iwata, an academic who has advocated a ramping up in Japan’s monetary base, and Hiroshi Nakaso, a senior BOJ official, as deputy governors, according to a government official with knowledge of the matter who asked not to be named as the talks are private. Japanese media reported on the nominations earlier.

The pound slid against the dollar for a second day after Moody’s lowered the rating on the U.K. by one level to Aa1 from Aaa. It cited weakness in the nation’s growth outlook and challenges to the government’s fiscal consolidation program, according to a Feb. 22 statement.

The Australian dollar sank against all its major peers except the yen after data indicated China’s manufacturing may expand at a slower pace this month. China is Australia’s biggest trading partner. The preliminary reading of a Purchasing Managers’ Index was at 50.4 in February, according to a statement from HSBC Holdings Plc and Markit Economics today. That compares with the 52.3 final reading for January and the 52.2 median estimate of analysts surveyed by Bloomberg News. A number above 50 indicates expansion.

EUR/USD: during the Asian session, the pair traded in the range of $1.3180-20.

GBP/USD: during the Asian session the pair fell to $1.5070, but later recovered.

USD/JPY: during the Asian session, the pair rose to Y94.60, but later dropped Y93.95.

A fairly light data calendar for today, Italian bond auction at 1000GMT to provide the morning interest. There is only a limited UK data calendar, with the release of the January BBA Lending Data. At 1545GMT, UK Chancellor George Osborne is set to appear before the Parliamentary Commission on Banking Standards, in what could be a rocky appearance following the UK's sovereign downgrade on Friday.