The Japanese yen stays mildly soft in Asian session after data showed trade deficit came in at JPY -0.36T in September, largely unchanged from prior month's JPY -0.37T. But that was larger than expectation of JPY -0.07T. Exports dropped for the third consecutive months by -1.7% mom while imports dropped for the second month by -0.8% mom. Yen pulled back a lot since August as risk sentiments stabilized. There have been speculations of further stimulus by BoJ as core inflation turned negative since July. But recent comments from BoJ officials suggested that they will look past the impact of decline in oil price. And, barring further financial shock from China or devaluation of Yuan, BoJ will likely hold their hands in near term.
Bank of Canada rate decision is a main focus today and the central bank is expected to keep interest rate unchanged at 0.50%. Canadian dollar lost momentum as crude oil failed to sustain above 50 and is back at around 46. Some analysts noted that Liberal Party's win in the general election will turn focus from monetary stimulus to fiscal stimulus in Canada. But markets reactions to the result of the reaction is muted so far. Meanwhile, BoC is expected to continue with its neutral stance. With tame inflation, there is no scope for a rate hike. Meanwhile, as the selloff in commodity stabilized, and relatively solid performance in US economy, there is no need for BoC to cut rates.
Elsewhere, Japan will release all industry activity index while UK will release public sector net borrowing today.