Asian session: The yen strengthened

04:30 Japan All Industry Activity Index, m/m May +0.4% +1.3% +1.1%

The yen strengthened against all 16 of its major peers as Asian stocks declined, boosting the allure of haven currencies, before upper-house elections of Japan’s parliament on July 21. Abe’s Liberal Democratic Party and its coalition partner New Komeito are on track to win more than 65 of the 121 upper house seats being contested, according to a poll published in the Nikkei newspaper on July 17.

The yen erased its decline as Japanese stocks dropped after Koichi Hamada, an adviser to the prime minister, said the nation’s consumption tax must be raised “at some point” because Japan’s finances aren’t solid when viewed from an extremely long-term perspective.

The Australian dollar is set to complete its first weekly gain since mid-June before an inflation report next week that is likely to influence the Reserve Bank’s interest-rate decision in August. Australia’s consumer price index probably gained 0.5 percent in the second quarter from a 0.4 percent pace in the previous three-month period, economists forecast in a Bloomberg News survey before the July 24 data. The trimmed mean gauge of core prices climbed 0.5 percent compared with 0.3 percent in the previous quarter, the poll showed.

The kiwi strengthened today after a statistics department report showed permanent net migration to the nation climbed to a four-year high in June. Permanent arrivals exceeded departures by 2,330 in June, the most since May 2009, the data showed. Credit card spending rose 2.6 percent in June, the biggest increase in four months, according to separate data released today.

EUR / USD: during the Asian session the pair rose to $ 1.3150

GBP / USD: during the Asian session the pair rose to $ 1.5250

USD / JPY: during the Asian session the pair fell to Y99.80

UK data will be released at 0830GMT, when the June public sector finance data crosses the wires. Aside from the Treasury commentary, all the focus on the public finances is on underlying borrowing measures - which exclude a raft of distorting factors. The Office for Budget Responsibility said at the time of the March Budget that stripping out special factors "the decline in cash borrowing now appears to have stalled. We expect PSNB to be broadly flat ... (in 2013-14) resuming its fall in 2014-15." Measured against this forecast, the tentative signs of an improvement in underlying borrowing this year would mark a better than expected outturn. PSNB is seen at stg 9.5 bn versus stg 10.5 bn previously.