In early Asian deals on Wednesday, the Japanese yen and the U.S. dollar climbed against their major counterparts as traders bought safe haven assets amid growing concerns that Greece may leave the euro zone.
Greek worries resurfaced after remarks from a former Greek Prime Minister Lucas Papademos late Tuesday, who warned that Greeks have no option rather than adhering with a painful austerity program or face an exit from the Eurozone that would destitute the economy.
The yen rose to 79.62 against the U.S. dollar and 125.56 against the pound, compared to Tuesday's close of 79.97 and 126.05, respectively. On the upside, the yen may target 79.00 against the greenback and 123.00 against the pound.
The Bank of Japan today left the monetary policy unchanged as expected after boosting the asset purchases at the end of April.
The Policy Board unanimously decided to retain the key uncollateralized overnight call rate steady at 0-0.1 percent. The size of the asset purchase and credit facility was also left unchanged at JPY 40 trillion and JPY 30 trillion respectively.
According to the Ministry of Finance, Japan saw a merchandise trade deficit of 520.27 billion yen in April - missing forecasts for a shortfall of 470.8 billion yen following the downwardly revised deficit of 84.5 billion yen in March.
Exports were up 7.9 percent on year, below expectations for an increase of 11.8 percent following the 5.9 percent increase in the previous month. Imports added an annual 8.0 percent versus forecasts for a gain of 10.1 percent but down from the revised 10.6 percent a month earlier.
Against the Australian and New Zealand dollars, the yen advanced to 2-day highs of 77.83 and 59.86 from yesterday's New York session close of 78.47 and 60.35, respectively. The next upside target level for the yen is seen at 77.00 against the aussie and 59.00 against the kiwi.
In economic news from Australia, a leading indicator of the country's economic activity rose again in March, but continued to remain below its long-term trend, a survey by Westpac and Melbourne Institute showed.
The leading index, which indicates the likely pace of economic activity three to nine months into the future, was 2.2 percent in March, below its long term trend of 2.9 percent.
The Japanese currency that ended Tuesday's trading at 84.47 versus the franc rose to a 2-day high of 84.07. If the yen gains further, it may target 83.5 level.
Presently, the yen is trading at 78.00 against its Canadian counterpart with 77.00 seen as the next upside target level. At yesterday's close, the pair was quoted at 78.37.
The U.S. currency spiked up to 5-day highs of 1.2647 against the euro and 0.9500 versus the franc, compared to yesterday's closing values of 1.2686 and 0.9472, respectively. On the upside, the dollar may target 1.25 against the euro and 0.955 against the franc.
The greenback ticked up to 1.0236 against the Canadian dollar and if the greenback advances further, it may target the 1.025 level. The pair finished yesterday's deals at 1.0208.
The greenback that ended Tuesday's trading at 0.7546 against the NZ dollar and 0.9812 against the Australian dollar strengthened to fresh multi-month highs of 0.7491 and 0.9744, respectively. If the greenback rises further, it may target 0.74 against the kiwi and 0.97 against the aussie.
In the European session, Eurozone current account data for March and BoE minutes for May meeting are scheduled for release.
Canada's retail sales for March and leading indicators for April, U.S. house price index for March and new home sales for April are due in the New York morning session.
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