Forex - Japanese yen steady to weaker in Asia ahead of data, BoJ remarks

Investing.com - The Japanese yen held flat to weaker in Asia early Wednesday ahead of a mild data set and remarks due from a central bank board member.

In Japan, July machinery orders and CGPI data are due at 0850 Tokyo time (2350 GMT). The forecast for CGPI is a gain of 4.1% year-on-year, the 17th straight rise.

For machinery orders, the forecast for private-sector core orders (excluding volatile demand from electric utilities and for ships) is an increase of 4.0% on month, which would be
the second straight monthly rise.

Later in the day, Bank of Japan Deputy Governor Kikuo Iwata speaks to business leaders in Kanazawa City at 1030 to 1200 (0130 to 0300 GMT). The BoJ will release his speech at 1030 (0130 GMT). Iwata will hold a news conference from 1400 to 1430 (0500 to 0530 GMT).

USD/JPY traded at 106.21, up 0.01%.

In Australia, the Westpac-MI Consumer Sentiment Index due at 1030 (0030 GMT). The consumer sentiment index forSeptember could show another improvement to the key 100.0 level after a 3.8% month-on-month rise in August.

AUD/USD traded at 0.9209, up 0.05%.

Overnight, the dollar traded largely higher against most major currencies after markets bet the Federal Reserve will raise interest rates likely sooner next year than once anticipated.

The euro weakened to 14-month lows this week due to growing expectations that monetary policies in the U.S. and Europe will diverge, sentiments fueled by hawkish language in a Federal Reserve Bank of San Francisco report on Monday.

"Recently, subdued levels of volatility in financial markets have received some attention. For example, Federal Reserve Chair Janet Yellen (2014) noted that 'indicators of expected volatility in some asset markets have fallen to low levels, suggesting that some investors may underappreciate the potential for losses and volatility going forward,''" the report read.

"Prices of financial assets, such as stocks and bonds, are sensitive to unexpected changes in interest rates because their present values are determined by discounting future cash flows. Thus, the low volatility in asset markets could, in part, reflect market participants’ relative certainty about the future course of interest rates."

By Tuesday, investors felt the single currency had dipped too far and snapped up nicely priced positions, though the dollar held steady against most other currencies.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.05% at 84.31.