Forex - Yen holds weaker ahead of BoJ board review, NZ CPI ahead

Investing.com - The yen held weaker ahead of the latest Bank of Japan monetary policy review statement due Wednesday with New Zealand consumer prices also ahead.

USD/JPY traded at 118.84, up 1.08% in early Asia, while NZD/USD changed hands at 0.7673, down 1.39%. AUD/USD was also weaker at 0.8176, down 0.42% and EUR/USD held around 1.1554, down 0.44%.

In New Zealand, fourth quarter CPI data is due at 1045 local time, with expectations for a flat quarter and a year-on-year increase of 0.9%.

In Australia, the January Westpac-MI consumer sentiment is due at 1030 in Sydney (2330 GMT). In December, the index fell 5.7% m/m to 91.1, the lowest level since August 2011.

The main event for the day is due in Tokyo around 1230 (0330 GMT), with the BoJ due to make its policy announcement after its 2-day board meeting.

The BoJ is likely to keep monetary policy unchanged as officials continue monitoring the longer-term stimulative effect of falling energy prices. There has been some speculation of fresh easing in the wake of the SNB's decision last week, though most analysts believe this is unlikely.

BoJ Governor Haruhiko Kuroda will then host a news conference at 1530 (0630 GMT) to explain the board's decision.

Overnight, the dollar remained at 12-year highs against the other major currencies on Tuesday, after the International Monetary Fund cut its forecast for global economic growth in 2015 and as tepid Chinese economic growth data failed to boost investor confidence

Global growth is projected at 3.5% for 2015 and 3.7% for 2016, the IMF said in its latest World Economic Outlook report, reducing its forecast by 0.3 percentage points for both years. However, the IMF raised its outlook for U.S. growth this year.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, stood at 93.91 in early Asia.

The euro showed little reaction to a report showing that the closely watched ZEW index of German economic sentiment rose to an 11-month high of 48.4 in January from 34.9 in December, ahead of forecasts of 40.0.

The report boosted hopes that Germany’s economy, the euro zone’s largest would rebound in 2015 after weakening at the end of last year.

The ZEW survey of euro zone economic sentiment increased to a six-month high of 45.2 from 31.8 in December, beating forecasts of 37.6.

Sentiment on the single currency remained vulnerable as investors waited to see if the ECB would embark on an outright quantitative easing program at its upcoming meeting on Thursday.

Uncertainty over the outcome of Greek elections, due to be held on Sunday, with anti-bailout party Syriza leading in the polls also weighed.