Asian session: The yen remained lower

00:00 China Bank holiday

00:00 Japan Bank holiday

01:45 China HSBC Manufacturing PMI (Finally) December 50.5 50.5 50.5

05:30 Australia RBA Commodity prices, y/y December -1.9% -4.0%

The yen remained lower after its biggest annual decline since 1979 amid prospects the Bank of Japan will continue unprecedented stimulus measures to support the economy and end more than a decade of deflation.

Japan’s currency extended losses as BOJ Governor Haruhiko Kuroda said, in an interview published yesterday in Yomiuri newspaper, that policy makers will continue stimulus until inflation stabilizes at 2 percent. Kuroda said achieving 2 percent inflation in two years is the BOJ’s goal, according to the Yomiuri article. The central bank won’t necessarily end or scale back its stimulus program in two years, he said, according to the interview. Monetary policy in Japan is diverging from the U.S., where the Federal Reserve is expected to end bond purchases this year.

The euro held an annual gain against the dollar before a report today that economists estimate will show a gauge of factory output in the common-currency region climbed to a 31-month high in December. That would confirm the initial reading published by Markit on Dec. 16.

The Australian dollar earlier traded lower from its year-end close after a gauge of Chinese manufacturing by HSBC Holdings Plc and Markit Economics fell to 50.5 last month from 50.8 in November, indicating slower expansion. Government figures released yesterday showed a separate index for factory output fell for the first time in six months to match an August reading of 51.

EUR / USD: during the Asian session, the pair traded in the range of $ 1.3740-70

GBP / USD: during the Asian session, the pair rose to $ 1.6600

USD / JPY: during the Asian session, the pair rose to Y105.40

Focus today will be on EZ mfg PMI releases (starting with Spain at 0813GMT), with the UK release coming at 0928GMT. US weekly jobless claims to follow at 1330GMT along with US PMI and ISM at 1358GMT/1500GMT respectively.