The Japanese yen weakened against other major currencies in the pre-European session on Tuesday, as investors speculate that the Bank of Japan is likely to end ultra easy-monetary policy as early as next week.
Traders looked ahead to a slew of crucial economic data, including reports on consumer and producer price inflation, for more clarity about the U.S. central bank\'s interest rate moves.
The inflation data could have a significant impact on the outlook for interest rates, with U.S. Fed officials saying they need \"greater confidence\" that inflation is slowing before they consider cutting rates. However, the Fed is widely expected to leave rates unchanged at its monetary policy meeting next week.
The yen was trading higher against its major rivals in the Asian session.
In the pre-European session today, the yen fell to 4-day lows of 161.44 against the euro, 189.20 against the pound and 168.27 against the Swiss franc, from early highs of 160.28, 187.99 and 167.13, respectively. If the yen extends its downtrend, it is likely to find support around 163.00 against the euro, 192.00 against the pound and 170.00 against the franc.
Against the U.S., Australia, the New Zealand and the Canadian dollars, the yen slipped to 4-day lows of 147.63, 97.58, 91.06 and 109.55 from early highs of 146.62, 97.02, 90.48 and 108.79, respectively. The yen may test support near 151.00 against the greenback, 99.00 against the aussie, 93.00 against the kiwi and 111.00 against the loonie.
Looking ahead, U.S. CPI data for February, U.S. Redbook report and U.S. Federal Government monthly budget balance for February are due to be released in the New York session.