Investing.com - The Japanese yen weakened further on Monday after remarks from the central bank governor reiterating the most recent policy stance, while the Australian dollar posted further gains after comments on rates by a central bank official.
USD/JPY traded at 107.23, up 0.32%, while AUD/USD changed hands at 0.8783, up 0.45%.
The Reserve Bank of Australia's monetary policy is currently configured to support demand growth through low interest rates that encourage spending and push up asset prices, Assistant Governor Christopher Kent said Monday.
"Low interest rates also encourage expenditure to be brought forward, provide an incentive for savers to shift into riskier, higher-return assets, and push up asset prices to the benefit of those that own housing and equities," Kent said in prepared remarks.
Bank of Japan Governor Haruhiko Kuroda Monday repeated the official outlook that the annual inflation rate measured in core consumer prices is likely to remain subdued at around 1.25% "for some time."
"Japan's economy has remained on a modest recovery trend, although production has been weak amid the pullback in demand after the consumption tax hike," Kuroda said in prepared remarks.
Kuroda said that the economy is expected to continue its moderate recovery as the the effects of an April sales tax hike wanes gradually.
Year-on-year change in core CPI in September due out on Oct. 31 is expected to show a further slowdown to a gain of 1.0%, from a rise of 1.1% in August.
The BoJ also releases its third quarter regional economic report at 0500 GMT.
Last week, the dollar gained ground against the euro and the yen as upbeat U.S. economic reports eased concerns over the outlook for the recovery, after a week of volatile trading, fuelled by fears over a slowdown in global growth.
The US Dollar Index, which tracks the performance of the greenback against a basket of six major currencies, fell 0.04% to 85.28, but still ended the week lower, its second consecutive weekly decline.
The greenback was boosted after a report showed that the University of Michigan’s consumer sentiment index unexpectedly rose.
Another report showed that housing starts rose more than expected last month, bolstering the outlook for the sector.
The data reinforced expectations that the Federal Reserve will raise interest rates in the second half of 2015.
The dollar fell against the other major currencies on Wednesday, touching a one month low against the yen and a three week trough against the euro amid a selloff sparked by fears that slower global growth would act as a drag on the U.S. economy.
Dovish comments by central bank officials on Friday also helped ease investor jitters over slowing growth in major economies.
Bank of England chief economist Andy Haldane that rates could remain lower for longer and warned that global economic conditions have worsened.
On Thursday, European Central Bank official Ewald Nowotny said the bank still has leeway for more action to address slowing inflation in the euro area and added that quantitative easing would start as soon as December.
In the week ahead, China and the U.K. are to release preliminary data on third quarter economic growth, while the euro zone is to release preliminary data on private sector activity.
The U.S. is to release data on consumer inflation, as well as reports on both existing and new home sales.
On Monday, Germany’s Bundesbank is to publish its monthly report. Canada is to release data on wholesale sales.