Asian session: The yen extended its three-week decline against the euro

The yen extended its three-week decline against the euro after Deputy Governor Kikuo Iwata reiterated the Bank of Japan’s commitment to unprecedented monetary easing. The yen weakened against all its major peers as the BOJ is due to meet this week, and is expected to continue buying more than 7 trillion yen ($72 billion) in Japanese government bonds each month to end deflation. The BOJ will continue to buy bonds until it achieves its 2 percent inflation target, Deputy Governor Iwata said yesterday in Shimonoseki, western Japan. The country’s monetary and fiscal policies are at a critical point for ending deflation, he said. Policy makers hold a one-day meeting on Oct. 31.

The euro traded near a two-year high against the dollar before the Federal Reserve begins a two-day meeting tomorrow, with economists predicting policy makers will refrain from tapering stimulus. Fed policy makers, meeting tomorrow and Oct. 30, are trying to gauge the strength of the U.S. expansion. The central bank will wait until its March 18-19 meeting to pare the monthly pace of asset buying to $70 billion from $85 billion, according to the median of responses in a Bloomberg News poll this month.

The Australian and New Zealand dollars strengthened against most of their major peers before a report this week predicted to show manufacturing grew at the fastest pace in 18 months in China, the biggest trading partner of both South Pacific nations. The National Bureau of Statistics and China Federation of Logistics and Purchasing will say the Purchasing Managers’ Index (CPMINDX) rose to 51.2 in October, according to the median estimate of economists ahead of the Nov. 1 report.

EUR / USD: during the Asian session the pair traded in the range of $ 1.3795-15

GBP / USD: during the Asian session, the pair traded in the range of $ 1.6165-90

USD / JPY: during the Asian session the pair rose to Y97.65

Early European releases start with the 0645 GMT release of France Sep consumer spending and Oct consumer confidence. This is to be followed by Italy's Oct ISTAT business survey at 0900 GMT. Over to the UK after that, at 1000 GMT, with the release of the UK Oct CBI Distributive Trades Survey. Later, at 1030 GMT Germany's Bundesbank Vice President Sabine Lautenschlaeger speaks on banking supervision in the past and future, in Frankfurt. About an hour later, at 1130 GMT EMU ECB Governing Council member Luis Linde is scheduled to give a speech at a conference on family-owned businesses, in Jerez de la Frontera, Spain.

The week ahead will be packed with data, as both the Census Bureau and the Labor Department play catch-up with data postponed due to the government shutdown. US Sep Industrial Production and Sep Capacity Utilization start the data slate today with a 1315 GMT release followed by the 1400 GMT release of US Sep NAR Pending Home Sales. 30 minutes later, US Oct Dallas Fed Mfg Survey is then due at 1430 GMT. In terms of speeches in the US today, US Acting FHFA Director Ed DeMarco and CFPB Director Richard Cordray are both due to speak to a housing conference on new regulations, in Washington at 1445 GMT. Then, at 1530 GMT US FHA Commissioner Carol Galante is scheduled to give a speech on reforming finance at a conference in Washington. Following that, EC Economic and Monetary Affairs Commissioner Ollie Rehn will speak on Europe's path to recovery at 0200 GMT in San Francisco.