Asian Stocks Rise After Fed Begins Tapering U.S. Stimulus

By Adam Haigh and Yoshiaki Nohara Dec 19, 2013 11:18 AM GMT+0800

Asian stocks rose after the Federal Reserve expressed enough confidence in the U.S. labor market to taper asset purchases while still promising to hold interest rates close to zero.
Fast Retailing Co., Asia’s biggest apparel chain, climbed 3.5 percent, pushing Japan’s Nikkei 225 Stock Average toward the highest closing level since 2007 as the yen touched a five year-low against the dollar. Fanuc Corp. (6954), a Japanese maker of factory robots, rose 4 percent to be headed for the highest close on record. Caltex Australia Ltd. surged 11 percent as the petroleum refiner said profit may climb to A$340 million ($300 million).
The MSCI Asia Pacific Index advanced 0.2 percent to 138.56 as of 12:01 p.m. in Tokyo, with more than two stocks rising for each that fell. The Fed announced plans to cut its monthly bond purchases to $75 billion from $85 billion, taking its first step toward unwinding the unprecedented stimulus put in place by outgoing Chairman Ben S. Bernanke to help the economy recover from the worst recession since the 1930s.
“It’s a win win for markets,” Shane Oliver, who helps oversee $131 billion as head of investment strategy at AMP Capital Investors Ltd. in Sydney, said by phone. “They are more optimistic on the employment rate and the economy while still keeping loose monetary policy in place with low rates to support the economy. We’re happy to stay overweight equities and if anything buy a bit more.”

Regional Gauges

Japan’s Topix index rose 0.9 percent and the Nikkei 225 climbed 1.6 percent as the yen touched the lowest intraday level since October 2008. It traded at 103.99 per dollar as of 12:11 p.m. in Tokyo.
Australia’s S&P/ASX 200 Index (AS51) jumped 1.6 percent. Trading volume was 50 percent higher than the 30-day intraday average as equity index and single stock options contracts expired. New Zealand’s NZX 50 Index gained 0.7 percent after a report showed economic growth accelerated to the fastest pace in almost four years in the third quarter. South Korea’s Kospi index increased 0.1 percent.
Hong Kong’s Hang Seng Index added 0.2 percent, paring gains of as much as 1.1 percent. The Hang Seng China Enterprises Index of mainland shares traded in the city lost 0.2 percent, reversing earlier gains. The Shanghai Composite Index was little changed. China’s interest-rate swaps jumped the most since July, touching a record, as the central bank refrained from injecting cash into the financial system.
Fu Shou Yuan International Group Ltd., a death-care provider, jumped 50 percent in Hong Kong in its trading debut.
Taiwan’s Taiex index added 0.4 percent and Singapore’s Straits Time Index increased 0.1 percent.
The Fed said its benchmark interest rate is likely to stay low “well past the time that the unemployment rate declines below 6.5 percent, especially if projected inflation continues to run below” the Fed’s 2 percent goal.

Bernanke Comments

“Reflecting cumulative progress and an improved outlook for the job market, the committee decided today to modestly reduce the monthly pace at which it is adding to the longer-term securities on its balance sheet,” Bernanke told reporters in Washington yesterday after concluding a two-day policy meeting of the Federal Open Market Committee.
The U.S. Senate yesterday cleared and sent to President Barack Obama a $1.01 trillion budget deal, lowering the U.S. deficit over 10 years and easing $63 billion in automatic spending cuts. The plan keeps in place about half of the reductions known as sequestration for next year, and about three-quarters of the planned cuts for 2015.
The MSCI Asia Pacific Index gained 6.9 percent this year through yesterday as central-bank stimulus shored up global economic growth. The gauge yesterday traded at 13.7 times estimated earnings, compared with 16.3 for the Standard & Poor’s 500 Index and 14.8 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Best Performer

The Topix rose 45 percent this year through yesterday, the most among 24 major developed markets tracked by Bloomberg, amid unprecedented stimulus by the Bank of Japan in support of Prime Minister Shinzo Abe’s efforts to end 15 years of deflation. The yen slumped 15 percent this year, the most among G-10 nation currencies tracked by Bloomberg.
Futures on the S&P 500 Index dropped 0.2 percent today after the equities gauge surged 1.7 percent to a record 1,810.65 yesterday. The Dow Jones Industrial Average soared 1.8 percent to 16,167.97, also a record. The cost of protecting against equity losses as measured by the Chicago Board Options Exchange Volatility Index slid 15 percent, the biggest drop in two months.

Asian shares fall on Fed taper fears after jobs data

(Reuters) - Asian shares tumbled on Monday as strong U.S. jobs growth reinforced the likelihood that the Federal Reserve will roll back its stimulus in coming months, sending the dollar to a three-year high against a basket of major currencies.

Chinese stocks and regional sentiment were hurt by Beijing's plan to choke off credit to force consolidation in industries plagued by overcapacity as it seeks to end the economy's reliance on investment funded by cheap debt.

U.S. employers added 195,000 new jobs to their payrolls last month, beating expectations of 165,000. Adding to the positive sentiment, the figures for April and May were revised up by a combined 70,000. The unemployment rate held steady at 7.6 percent as more people entered the workforce.

Friday's sharp selloff in U.S. Treasuries - with the 10-year yield suffering its biggest one-day rise in nearly two years - accelerated losses that started in May over the uncertainty of the Fed's $85 billion a month bond-buying program.

Yields on 10-year U.S. Treasuries, which move opposite to price, were at 2.7171 percent, turning slightly lower after climbing to a nearly two-year high of 2.755 percent in Asian trade. They jumped 23.3 basis points to 2.736 percent on Friday, driving up U.S. dollar borrowing costs.

"The money in the market is very short term right now. Most investors have given up hope for any stimulus from Beijing, but now it seems they could be rolling out stricter ground rules to aid the restructuring of the economy," said Jackson Wong, vice-president for equity sales at Tanrich Securities in Hong Kong.
MANIC MONDAY

Shares in MSCI's Asia-Pacific ex-Japan index .MIAPJ0000PUS, shed 1.6 percent, while Chinese equities .CSI300 fell 1.3 percent after losing as much as 2.9 percent, and Hong Kong's Hang Seng Index .HSI dropped 2.2 percent.

China's resolve to overhaul its economy for long-term improvement will be tested this month if a slew of data show growth is grinding towards a 23-year low, as expected.
The median forecast of 21 economists surveyed by Reuters show China's economy likely expanded 7.5 percent in April-June from a year ago, slowing from the previous three months as weak demand dented factory output and investment growth.

The CSI300 index has lost 13 percent so far this year, while the MSCI Asian gauge is down 10 percent.
The weakness in Chinese markets dragged Tokyo's Nikkei share average .N225 from a six-week high touched earlier in the session on Monday. The Japanese benchmark was up 0.4 percent after climbing as high as 1.3 percent.

"I don't think it's negative for Japan," said a hedge fund manager, who declined to be identified, referring to higher dollar borrowing costs.
"For ASEAN countries, it is more of a concern if rates continue to go up. A lot of the funding for some of these countries is dollar-denominated."

The selloff in Treasuries also hurt Japanese government bonds on Monday, with the 10-year yield up 2 basis points to 0.875 percent.

DOLLAR HIGH

The dollar hit a six-week high of 101.54 yen after gaining 1.2 percent on Friday, its biggest one-day rise in a month.

"The dollar looks likely to gain further. But then again, if Chinese shares face more pressures, we could see a bigger dip in the dollar/yen," said Koichi Takamatsu, forex manager at Nomura Securities in Tokyo.
Against a basket of major currencies, the dollar .DXY advanced 1.5 percent to a three-year high.
The euro was steady at $1.2826 but not far off a seven-week low of $1.2806. The common currency dropped 1.4 percent in the previous two sessions on the U.S. jobs data and the European Central Bank's dovish policy guidance.

Brent crude prices added 0.2 percent to near $108 a barrel, extending Friday's 2.1 percent rise on the strong U.S. data and concerns over Egypt's unrest increasing instability in the Middle East.
Copper prices put on 0.2 percent to just above $6,800 a tonne after shedding 2.3 percent in the previous session as the dollar firmed, while gold eased 0.4 percent, extending Friday's 2 percent decline.

(Additional reporting by Clement Tan in Hong Kong and Hideyuki Sano in Tokyo; Editing by ERic Meijer)

Gold Bulls Split With Buffett as Traders Say Sell: Commodities

Hedge funds increased bets on a gold rally by the most in three weeks as central banks signaled no end to economic stimulus, driving prices higher just as analysts and traders turned the most bearish in three years.
The funds and other large speculators raised their net-long position by 19 percent to 54,762 futures and options as of April 30, U.S. Commodity Futures Trading Commission data show. Holdings of so-called short contracts retreated 9.2 percent, the most since March 19. Net-bullish wagers across 18 U.S.-traded raw materials jumped 28 percent to 550,182, the biggest increase in seven weeks, led by gains in soybeans, cocoa and crude oil.

Gold rallied 4.9 percent in the past two weeks after entering a bear market April 12. The Federal Reserve raised the prospect of increasing its monthly bond buying on May 1 and the European Central Bank cut borrowing costs to a record low the next day. Billionaire investor Warren Buffett said the metal has no appeal even after the slump, and a weekly Bloomberg survey of analysts and traders was the most bearish since February 2010.
“It’s reasonable to say that the currency debasement and easing measures will support gold,” said Alan Gayle, a senior strategist at RidgeWorth Capital Management, which oversees about $48 billion of assets. “The bulls still have to prove a lot. There is lot of skepticism surrounding gold. We have to watch to see if prices have found a near-term bottom.”

Gold Rebounds

Futures climbed 0.7 percent to $1,464.20 an ounce on the Comex last week. Prices rebounded 11 percent since reaching a two-year low on April 16. The Standard & Poor’s GSCI Spot Index of 24 commodities rose 1.4 percent last week, and the MSCI All- Country World of equities gained 1.7 percent. The dollar slid 0.5 percent against a basket of six major peers, and a Bank of America Corp. Index shows Treasuries fell 0.4 percent. Gold was 0.7 percent higher at $1,474 by 11 a.m. in London.
The Fed said at the end of a two-day policy meeting in Washington last week it’s “prepared to increase or reduce the pace of its purchases” of $85 billion in debt a month. Gold surged 66 percent since the end of 2008 as the Fed was joined by central banks in Europe and Japan in printing unprecedented amounts of money, almost doubling sovereign debt to more than $23 trillion, a Bank of America index shows.

Investors’ Faith

The flood of cash spurred investors including billionaire John Paulson to hold the metal as a hedge against inflation. Gold remains the best store of value in an uncertain economy, Elliott Management Corp. told clients even as the $21.8 billion hedge-fund firm founded by Paul Singer lost money on its position this year. Threadneedle Investments, a London-based fund with $131 billion in assets, remains bullish on gold as central banks stick with printing money to weaken their currencies and revive growth.
Some investors’ faith in the metal has waned as inflation fails to accelerate even as central banks add liquidity. Global holdings of the metal through exchange-traded funds slumped to the lowest since October 2011 after touching an all-time high in December. Buffett, the third-richest person in the Bloomberg Billionaires Index, said last year in his annual letter to shareholders that investors should avoid gold.
“If it went to $800, I wouldn’t be a buyer,” Buffett, the chairman and chief executive officer of Berkshire Hathaway Inc., told reporters in Omaha, Nebraska, on May 2. “It just sits there, and you hope somebody pays you more for it.”

Gold Outflows

Money managers withdrew $1.67 billion from commodity funds in the week ended May 1, said Cameron Brandt, the director of research for Cambridge, Massachusetts-based EPFR Global, which tracks money flows. Outflows from gold and precious-metals funds totaled $1.79 billion, he said.
Gold prices had the biggest two-day drop in more than three decades last month, and a majority of the 38 analysts surveyed by Bloomberg said the metal’s 12-year winning streak is over. While the hedge funds’ short holdings declined in the week through April 30, they are still more than triple the average since 2006, when the data begins. Goldman Sachs Group Inc. said April 23 the precious metal may slide to $1,390 in 12 months, and Deutsche Bank AG predicts a drop to as low as $1,050.
“There are no inflationary worries, and gold is responding to the global deflationary pressure,” said Jim Russell, a senior equity strategist in Cincinnati at U.S. Bank Wealth Management, which oversees about $110 billion in assets. “There are no catalysts for gold to rise at the moment.”

Mint Sales

Last month’s declines attracted retail buyers. Sales of gold coins by the U.S. Mint in April rose to the highest since December 2009, while the U.K. Mint said it is increasing output after demand more than tripled. Australia’s Perth mint has stayed open through the weekend to meet orders that reached a five-year high. Physical flows into India, the biggest consumer, climbed to at least five times the average of the past 12 months, UBS AG said May 3.
Central banks are still adding to gold reserves that are now at an eight-year high, according to International Monetary Fund data. Banks bought 534.6 metric tons last year, the most since 1964, according to the London-based World Gold Council. They are on pace to exceed that this year, Jason Toussaint, the managing director of investments at the council, said April 30.
Investors raised their bets on a rally for crude oil by 6.3 percent to 193,962 contracts, the first gain in three weeks, the CFTC data show. The funds increased platinum holdings by 17 percent to 22,355, the biggest gain since January. Palladium and silver wagers also increased.

Farm Bets

A measure of speculative positions across 11 agricultural products surged 86 percent to 197,692 contracts. The funds narrowed their bets on a decline in wheat to a net-short position of 5,779 contracts, from 20,870 a week earlier. Bullish corn holdings more than tripled to 45,497.
Wheat output in Kansas, the biggest U.S. grower of winter varieties, will fall 18 percent in 2013 to 313.1 million bushels after drought last year was followed by an April freeze, surveys from a three-day annual crop tour showed.
“Weather conditions could push wheat prices higher, and it could outperform other agriculture commodities,” said Nic Johnson, who helps manage $30 billion of commodity assets at Pacific Investment Management Co. in Newport Beach, California. “It’s not a one-way direction for gold. While many have changed their minds and gone bearish, we stick to the fact that gold prices will likely go higher.”

FOREX-Yen weakens, euro rallies as gold-induced worries ease

By Daniel Bases and Wanfeng Zhou
NEW YORK, April 16 (Reuters) - The yen tumbled against the dollar and the euro on Tuesday, reversing the previous session's sharp gains as investor anxiety triggered by a record plunge in gold prices eased, denting demand for the safe-haven Japanese currency.
A drop in U.S. consumer prices and slippage of U.S. factory output strengthened the argument for the U.S. Federal Reserve to maintain its monetary stimulus in hopes of boosting the economy.
"The CPI data reinforces the view that the Fed is likely to engage in quantitative easing for some time," said Eric Viloria, senior currency strategist at Forex.com. "That is one of the reasons for support of the markets and sentiment in general. I think that is aiding the rebound here (in the yen) and why the U.S. dollar is weak."
Finance minister and central bankers from the world's leading economies will discuss economic and financial market outlooks, including the Cyprus crisis and asset price reactions, at the talks among the Group of 20 advanced and emerging economies beginning on Thursday in Washington.
The euro rallied to a seven-week high against the dollar, partly helped by its 2 percent jump against the yen. Investors shrugged off data showing a sharp fall in German investor sentiment in April.
A break of the euro above its 100-day moving average against the greenback around midday in New York spurred some blackbox algorithmic trading that further boosted the euro.
"A more significant signal is if we close above that level, and it looks like we might do that," said Viloria.
The euro rose 1.1 percent to $1.3184, with central bank buying reported. It hit a session peak of $1.3201, the strongest since Feb. 25, after breaking resistance around $1.3140/50. The next key level on traders' charts is in the $1.3270/1.3300 area.
REVERSAL
Gold rose on Tuesday, one day after a record-breaking drop sparked a broad selloff in commodities and equities alike. Monday's explosions in Boston added to the nervous tone in financial markets.
Two bombs ripped through the crowd at the finish line of the Boston Marathon on Monday afternoon, killing three people and maiming and injuring more than 100. President Barack Obama on Tuesday called the bombings an "act of terror."
"Yesterday there was a lot of fear in the market, especially as people were watching what's going on in gold," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York. "There's a thought that maybe things were overdone in the yen cross."
But as gold and stock prices stabilized and investors concluded that the bombings may have been an isolated incident, they resumed buying higher-risk assets and selling the safe-haven yen.
A senior Canadian financial official said Canada was supportive of Japan's effort to kick-start its economy and that the G20 believed policy should target domestic economies and not exchange rates. The comments added to buying sentiment for the euro against the yen from oversold levels, analysts said.
The dollar peaked at 98.15 yen, according to Reuters data. It last traded up 0.83 percent to 97.55 yen.
A sharp rally in the dollar against the yen stalled in recent sessions as investors booked profits ahead of significant resistance and option barriers at the psychological 100-yen-per-dollar level. Analysts said, however, that the weakening yen trend remained intact after the Bank of Japan's aggressive monetary easing earlier this month.
"The fundamental picture still remains supportive of a weaker yen going forward as the recent rebound over the last couple of days is unlikely to prove sustainable," said Lee Hardman, currency economist at BTMU, which forecasts the dollar at 109 yen in 12 months.
Investors will also closely monitor gold prices, and another plunge could renew demand for the most liquid currencies such as the dollar and yen.
The euro rose 2 percent to 128.66 yen, having hit a session peak of 128.99 yen, according to Reuters data.
The Australian dollar rose 0.75 percent to $1.0389, while the New Zealand dollar gained 1 percent to $0.8497 . Both saw steep losses in the previous session.

Raid on Cypriot deposits shakes Europeans' faith in savings

By Harry Papachristou and Sonya Dowsett ATHENS/MADRID
Sun Mar 17, 2013 5:01pm EDT

(Reuters) - Europeans' faith in the safety of their savings has been shaken by a levy on Cypriot bank deposits to pay for a bailout, even though there was no sign of a rush to withdraw cash in Madrid or Dublin.
People told Reuters they were angered but unsurprised that politicians should dip into citizens' deposits. And as bankers expressed concern the proposed terms of Cyprus's bailout could unnerve savers elsewhere, some leftist leaders voiced outrage.

Euro zone finance ministers want Cypriots to pay up to 9.9 percent of their deposits in return for a 10 billion euro ($13 billion) aid package. If approved by the island's parliament on Monday, it will be the first time savers have had to foot part of the bill for a European bailout.

"What they did to the Cypriots was a disgrace," said Maria Spyrou, 57-year-old Athens housewife who says she must support a daughter, a nurse, who hasn't been paid for nine months.
"We won't pull our money from the bank here," she said. "In Greece, they have found other ways to rob us, more ingenious and sly ways -- with fuel taxes, property poll taxes, you name it."

The chief of Greece's main opposition, anti-bailout Syriza party, leftist Alexis Tsipras, blamed the move on German Chancellor Angela Merkel.
"We must all together raise a shield to protect the peoples (of Europe) from Ms Merkel's criminal strategy," said Tsipras, who wants a pan-European debt conference to forgive debt.

In Lisbon, Joao Semedo, leader of Left Bloc, one of the country's smaller left-wing parties, warned Portuguese deposits would be at risk if European creditors insist on more austerity.
"The Portuguese government will not hesitate in resorting to bank deposits," said Semedo.
Greece and Portugal, like Ireland and Spain, have received European aid to shore up their economies, in return for painful cuts to spending and tax hikes.

In northern European countries, concerned at how much they might have to pay for bailing out indebted states, there was little sign of anxiety on Sunday. Finnish Prime Minister Jyrki Katainen said the levy was fair.
European officials have been at pains to stress that Cyprus is a special case - with terms not applicable to other bailouts because of the size of Cyprus's banking sector and its large foreign deposits.

NO SAVINGS TO WITHDRAW

But in Madrid, Ana Garcia, a 62-year-old worker at a mental health centre who was attending a protest against the privatization of the health service on Sunday, thought Spaniards could also face a hit on their savings.

"European countries are very calm thinking it could never happen to them. But we'll all get involved sooner or later," said Garcia, who added she had no savings to take out of the bank even if she wanted to.
News of Cyprus's bailout added anxiety to St Patrick's Day celebrations in Dublin.

"It's outrageous" said Carmel Madden, an Irish 54-year-old former businesswoman. The news from Cyprus made her worry about holding proceeds from a house sale on deposit in a local bank.
"I'm more concerned now than I was eight months ago when I sold the house. I just don't know where my money would be safe."
She said she was not planning any withdrawal in the short term, mainly because she had not found a less risky alternative.

Despite the assurances that Cyprus is an exception, the tax on bank deposits risks unnerving savers elsewhere in Europe, according to the chief executive of one Greek bank.
"It's an extreme move, Cyprus may be a tiny state but this will injure the fragile sentiment in the euro zone's south," said the banker, who declined to be named.

Another senior Greek banker said: "What timing, just when the crisis seemed to be stabilizing. How can savers not worry that this may happen again elsewhere as part of bailouts?"

In Italy, where media and political parties are focused on the quagmire following last month's deadlocked election and support for an anti-establishment party has soared, many turned to social media to express their concerns.

"After Cyprus I suggest we find a way to protect our savings from possible forced levies ... the solutions exist!!," read a tweet by Giovanni Cuniberti, independent financial analyst and lecturer at the University of Turin.

(Writing by Jason Webb; Additional reporting by Conor Humphreys in Dublin, Andrei Khalip in Lisbon, Antonella Ciancio in Milan, Jussi Rosendahl in Helsinki and George Georgiopoulos and Renee Maltezou in Athens; Editing by Matthew Tostevin)

Greece may still have to quit euro - Merkel ally

BERLIN | Sat Mar 9, 2013 6:22pm GMT (Reuters) - Greece remains the biggest risk for the euro zone despite a calming of its economic and political crisis and may still have to leave the common currency, a senior conservative ally of German Chancellor Angela Merkel said. Alexander Dobrindt, general secretary of the Christian Social Union (CSU), the Bavaria-based sister party of Merkel's Christian Democrats (CDU), has long argued that Greece would be better off outside the euro zone. But German conservatives' criticism of Greece has eased since the conservative-led government of Prime Minister Antonis Samaras accelerated harsh austerity measures demanded by Germany and the EU as part of its bailout programme. FREE GUIDES AND REPORTS FROM DIANOMI "The greatest risk for the euro is still Greece... I still believe that Greece's exit would be a possible long-term alternative, for Europe and for Greece itself," Dobrindt told Die Welt am Sonntag newspaper, according to advance excerpts of the interview released on Saturday. "We have created a situation that gives Greece a chance to return to stability and restore competitiveness. But I still hold that, if Greece is not able or willing to restore stability, then there must be a way outside the euro zone." Dobrindt urged the European Commission, the EU's executive arm, to prepare the legal ground to allow for the legal bankruptcy of a euro zone member state and its exit from the currency union. Dobrindt's comments contrasted with those of the CSU chairman and Bavarian state premier, Horst Seehofer, who expressed solidarity with Greece and said it was on the "right path" when Samaras visited Munich last December. Seehofer's conciliatory tone echoed that of Merkel who, for all her frustration with the slow pace of Greek reforms, has decided that a "Grexit" would be far more costly for Germany and Europe than pressing on with the bailout programme. Merkel is also keen to avoid renewed market turbulence in the euro zone ahead of Germany's federal election in September. Bavaria also holds a state election in the autumn which the CSU is tipped to win. Dobrindt made headlines last summer when he suggested Greece should start paying half of its pensions and state salaries in drachmas - the national Greek currency before the euro - as part of a gradual exit from the euro zone. With Athens now enjoying relative political stability, German lawmakers have recently been more focused on how to rescue Cyprus, which is negotiating a bailout after its banks suffered big losses due to their heavy exposure to Greece. Italy, the euro zone's third largest economy, also poses a bigger challenge after a majority of voters there rejected German-backed austerity policies in an election last month that has left no party with a clear majority to govern. (Reporting by Gareth Jones; Editing by Mark Heinrich)

FOREX-Yen selloff fades before high-stakes BOJ decision

By Ian Chua SYDNEY, Jan 22 (Reuters) - The yen's recent violent selloff came to an abrupt halt Tuesday as investors waited to see if the Bank of Japan would deliver its most aggressive effort yet to beat years of economic stagnation, or disappoint as so often in the past. The dollar bought 89.63 yen, having peaked at a 2-1/2 year high of 90.25 on Monday. Since Dec. 4, the dollar has rallied an eye-watering 10 percent on the yen. The BOJ, which is starting its policy-setting meeting earlier than usual, is under intense political pressure to overcome deflation and lift the world's third biggest economy out of recession. But the Japanese central bank has a track record of disappointing markets and traders said if it simply announces a new inflation target of 2 percent and raises the ceiling of its asset-buying programme by 10 trillion yen, the yen could bounce back strongly. "Given the transparency surrounding this meeting...there is a strong possibility that this is a typical 'buy the rumour, sell the news' event," said Christopher Vecchio, currency analyst at DailyFX. On the other hand, if the BOJ committed to an open-ended asset-buying programme until its new inflation target is within grasp, traders said the yen could stay under pressure. The euro was at 119.38 yen, recoiling from a 20-month high around 120.73 set Friday. Trading was subdued overnight with U.S. markets closed on Monday for a public holiday. Against the dollar, the single currency was little changed at $1.3315. Since reaching a 10-month high of $1.3404 a week ago, the euro has struggled with selling interest seen above $1.3400. Still, with the European Central Bank recently sounding more cheerful about the outlook for the euro zone and dimming the prospects of more rate cuts, analysts suspect the euro can continue to outperform the dollar in the near term. The Bundesbank said on Monday Germany's economic slump should be short-lived, adding that the euro zone's largest economy could have already bottomed out. Commodity currencies also had a relatively sedated session overnight, leaving them steady against the greenback. The Australian dollar was at $1.0517, having traded in a slim range roughly between $1.0493/0525. Support is seen under $1.0500. The BOJ aside, there is no major economic news out of Asia on Tuesday. In Europe, a closely watched ZEW survey is expected to show German business morale and investor sentiment improved further in January.