Investing.com - The yen held weaker after the central bank held steady as expected in Asia on Thursday and the White House signaled it will not move to abandon the North American Free Trade Agreement as earlier reported, sending the Canadian and Mexican currencies higher.
President Donald Trump agreed not to terminate the NAFTA treaty at this time in phone calls with the leaders of Mexico and Canada, the White House said.
"Late this afternoon, President Donald J. Trump spoke with both President Peña Nieto of Mexico and Prime Minister Trudeau of Canada," the White House said.
USD/MXN fell 1.15% to 18.9589, while USD/CAD traded at 1.3533, down 0.63%.
"Both conversations were pleasant and productive. President Trump agreed not to terminate NAFTA at this time and the leaders agreed to proceed swiftly, according to their required internal procedures, to enable the renegotiation of the NAFTA deal to the benefit of all three countries. President Trump said, "it is my privilege to bring NAFTA up to date through renegotiation. It is an honor to deal with both President Peña Nieto and Prime Minister Trudeau, and I believe that the end result will make all three countries stronger and better."
The Bank of Japan held policy steady as widely expected, but raises its assessment of the economy.
The BoJ increased its real gross domestic product (GDP) forecast for the 2017-18 fiscal year to 1.6% from 1.5%, while keeping its target yield for the benchmark 10-year Japanese government bond at around 0% and ¥80 trillion annual pace of expansion of its monetary base.
Meanwhile, the European Central Bank's rate decision is expected at 7:45 p.m.
USD/JPY changed hands at 111.14, up 0.10%, while AUD/USD traded at 0.7487, up 0.19%. EUR/USD rose 0.06% to 1.0911.
The U.S. dollar index eased 0.10% to 98.75.
South Korea's gross domestic product grew 0.9% in the first quarter of 2017 from the previous three months, the central bank estimated on Thursday, accelerating on strong exports and capital investment.
Overnight, Treasury Secretary Steven Mnuchin and Economic Council Director Gary Cohn said Wednesday, that President Donald Trump’s tax reform plan would aim to provide tax relief to American families and lower the business tax rate from one of the highest in the world to one of the lowest.
Mnuchin reiterated the US corporation tax will fall to 15%, and confirmed a tax repatriation holiday for businesses that have sizeable investments overseas.
Meanwhile for individuals, the tax reform package proposed to reduce the 7 tax brackets to 3 tax brackets of 10%, 25% and 35% and repeal the Alternative Minimum Tax as well as the death tax.
“The goal is to simplify the tax system, lower rates, and make the system fairer” said Cohn.
Mr Cohn was reluctant to provide further details on how the Trump administration proposed to pay for the reforms outlined in the tax plan without increasing the budget, but said that the administration is still working with the House and the Senate to agree final details.
The tax reform plan did not include the border-adjustment tax that was favoured by House GOP leaders.