Forex - Yen, Aussie flat to stronger ahead of China HSBC flash PMI

Investing.com - The Japanese yen and Australian dollar held flat to stronger early in Asia on Tuesday with China in focus after Chinese Finance Minister Lou Jiwei said no change in economic policies was imminent despite recent indicators of relatively weak growth.

Lou's remarks came on Monday ahead of Tuesday's flash HSBC China manufacturing PMI for September with a reading of a borderline between expansion and contraction of 50 expected, down from last month's final of 50.2, a three-month low.

USD/PY traded at 108.83, down 0.015%, while AUD/USD traded at 0.8875, up 0.02%, ahead of the data. China is a top trading partner for Australia and Japan.

Overnight, the dollar traded lower against most major currencies after soft U.S. home sales numbers prompted investors to lock in gains from the greenback's recent rally and sell for profits.

The National Association of Realtors reported earlier that existing home sales in the U.S. unexpectedly fell 1.8% to an annual unit rate of 5.05 million in August. Analysts had expected existing home sales to rise 1% to 5.20 million units, and the soft numbers sent investors selling the greenback for profits.

Elsewhere, European Central Bank President Mario Draghi expressed concern about recovery in the euro area though the single currency rose on demand from bargain hunters, as loose monetary policies have already been priced into trading.

He reiterated that the ECB expects inflation to remain at low levels over the coming months before increasing gradually in 2015 and 2016.

Draghi said the ECB remains ready to use additional unconventional instruments within the bank's mandate should it become necessary to further address risks of a prolonged period of low inflation.

Data last week showed that the annual rate of euro area inflation was steady at 0.4% in August, the lowest level in almost five years.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 84.81.