ASIA session review: Yen remain under pressure

The yen fell the most in almost two weeks against the dollar after a newspaper report saying the Japanese government is weighing a corporate-tax cut boosted stocks and damped demand for safer assets.

Abe called for a study of lower corporate taxes as a counterweight to a sales-levy increase, the Nikkei newspaper reported, citing unidentified people in the government. Japan may raise the consumption tax by three percentage points next year to rein in a national debt of more than twice gross domestic product.

The Bank of Japan released minutes of its July meeting today, saying it expects moderate growth in the economy.

The U.S. Dollar Index rose before U.S. data tomorrow forecast to show retail sales increased for a fourth month, backing the case for the Federal Reserve to reduce stimulus.

EURO:

The euro gained some ground after strong German and European Economic Sentiment data. In Germany ZEW Survey showed economic sentiment to add to 42 from 36.3. In EMU ZEW rised to 44 from 32.8.

EUR/USD ested support at $1.3280. There is some buying interest in this area.. A sustained move through $1.3410/15 targets a return to 1.37, experts at TD Securities said.

A breakdown of $1.3260 would open the door to $1.3220. The initial resistance area is at $1.3400/20. Further - at $1.3460.

POUND:

GBP/USD added after some weak inflation data from UK.

Having posted session low at $1.5430 (initial support) cable bounced back to $1.5480. Minor resistance comes at $1.5520, then - at Friday’s highs at $1.5570 region. Below $1.5430 losses may widen to $1.5400/90 (recent lows) and $1.5300. 

YEN:

The yen declined at least 0.5% versus all of its 16 major counterparts as data showed machinery orders dropped in June, backing the case for further monetary stimulus. 

USD/JPY has break above Y97.00. Generally rate remains above recent lows on Y95.80 (initial support). Below losses may widen to Y95.20 (Jun 7 lows) and Y93.80 (Jun 13 lows). Initial resistance comes at daily highs on Y96.90/00, above - at Y97.60 (Jul 31 lows) and Y98.80. 

DATA AHEAD:

US data include Retail Sales ( 0.3% vs 0.4%) due at 12:30 GMT. 

At 22:45 NZ Retail Sales data will finish the day.

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