Forex - Yen weaker after some on BoJ board question bond buying pace

Investing.com - The Japanese yen showed little reaction to January central bank board minutes released Monday that questioned the pace of government bond buying, holding at weaker levels seen at the start of the day.

Some Bank of Japan board members said the pace of massive Japanese government bond buying may need to stop before reaching a 2% sustained inflation goal, according to minutes published of the January meeting on Monday.

Board members also said falling oil prices should be reflected in inflation expectations, but that the underlying trend of moving from a deflation mindset is progressing steadily.

It was the first time that board members had referred to the feasibility of continuing the key part of its nearly two-year-old quantitative and qualitative easing (QQE).

"Some members - noting that interest rates had recently been declining further under QQE - said that, when examining risks, it was necessary to closely monitor factors such as the effects this would have on financial institutions' business conditions and the risk of a buildup of financial imbalances," the minutes said.

"A few of these members noted that the feasibility of continuing asset purchases into the future warranted attention, even though it seemed technically possible to continue such purchases for some time."

USD/JPY changed hands at 119.06, up 0.03% after the data, unchanged from earlier. AUD/USD traded at 0.7833, down 0.11%, while EUR/USD was down 0.04% to 1.1379.

Markets in China are to remain closed for a national holiday.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was quoted at 94.46, up 0.06%.

Last week, the euro pushed higher against the dollar and the yen on Friday after euro zone finance ministers agreed on a deal to extend Greece’s bailout by four months.

The euro zone approved the extension of Greece’s €240 billion bailout, removing concerns that the country would face a liquidity crunch when its current bailout agreement expired at the end of the month.

Markets have been hit by growing concerns over a possible Greek exit from the euro area if the country missed a debt payment.

Athens has until Monday to present a list of reforms to be approved by the country’s creditors in order to secure the four-month bailout extension, which will give it more time to reach a lasting agreement with its creditors.

Earlier Friday, data showed that euro zone private sector activity expanded at the fastest pace in seven months in February, but firms continued cutting prices, underlining concerns over persistently low levels of inflation.

The Markit composite flash purchasing managers' index, which measures activity in the manufacturing and services sectors, rose to 53.5, the highest since July 2014 from a final reading of 52.6 last month.

In the week ahead, Tuesday’s testimony by Federal Reserve Chair Janet Yellen to the Senate Banking Committee will be closely watched for any indication on when U.S. interest rates may start to rise.

Traders will also be watching Monday’s deadline on Greece's financial rescue package.

On Monday in Germany, the Ifo research group is to publish its report on business climate.

The U.K. is to release private sector data on retail sales.

Later Monday, the U.S. is to publish a report on existing home sales.