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The dollar remains bullish against the yen, while the euro hit a new four-year high against the Japanese currency in today’s Asian session. Bank of Japan Governor Kuroda kept markets speculation that the yen will weaken over time as the BOJ continues with its aggressive monetary easing policy and asset purchase program which is aimed at fighting deflation in Japan. The euro climbed to a high of 137.97 yen in the early Asian session while the dollar pushed past Friday's high and climbed to 101.90 yen, the highest since May 29. The increasingly diverging monetary policies of the Federal Reserve and the Bank of Japan will help keep the dollar/yen’s upward momentum. Against the dollar, the euro hit a high of $1.3559 before declining slightly on profit taking to $1.3539. The euro has made a substantial recovery from last week’s tumble to $1.3398, caused by rumours of negative interest rates from the European Central Bank. These rumours have since been downplayed by ECB Chief Mario Draghi. The British pound remained above the key $1.62 level, with GBPUSD hitting an early session high of $1.6239. The Aussie slid lower to a new 2-1/2 low of $0.9120 as it remains under pressure by the threat of intervention from the Reserve Bank of Australia after comments from Governor Stevens last week who said he is “open-minded” about such a move as he believes the AUD is overvalued compared with fundamentals.

The yen dropped to its weakest level in four months versus the broadly stronger US dollar in today’s Asian session. USDJPY hit a session high of 100.80 yen and ended the session with a 0.6% gain at 100.70 yen. The diverging monetary policies between the Bank of Japan and the Fed are causing a wider gap between US bond yields and Japanese JGB yields and hence a higher dollar versus yen. The Bank of Japan left its monetary policy unchanged during its meeting today while the Fed last night signaled it could scale back stimulus as soon as the next meeting. The euro is under pressure due to market rumors of the ECB is considering negative deposit rates. The broadly stronger dollar is also putting pressure on the euro. EURUSD fell to a low of 1.3412 in the Asian session, and ended with a 0.06% loss at 1.3428. GBPUSD ended the session down 0.08% at 1.6089. The Australian dollar took a beating after disappointing data from China, which is Australia’s largest trading partner. AUDUSD closed the Asian session with a 0.2% loss at 0.9304. The Chinese HSBC manufacturing flash PMI index of business confidence for November dipped to 50.4 compared to 50.9 the previous month.