Yen Rises After BoJ Kuroda Comments

The Japanese yen strengthened against other major currencies in the early European session on Monday, after a speech by Bank of Japan Governor Haruhiko Kuroda saying that the bank is willing to use every possible tool, if necessary, to achieve its price stability objective.

Speaking to the business leaders in Osaka, the BoJ Governor Kuroda said that there is no better opportunity than now to completely get out of deflation. Just talking about a limit to monetary policy does not help at all, said Kuroda.

The BoJ last week modified its policy framework, giving thrust to the yield curve as it still struggles to achieve the inflation target.

Meanwhile, market attention turned from central bank meetings to U.S. politics ahead of tonight's crucial debate between Hillary Clinton and Donald Trump. The first of the three presidential debates can have a significant effect on presidential election polling.

A Washington Post-ABC News poll has Democratic presidential nominee Hillary leading Republican candidate Trump by 2 points on the eve of the debate.

In other economic news, data from the Cabinet Office showed that the leading index for Japan fell to 100.0 in July from 100.6 in June, which was revised down from 100.7.

The coincident index that reflects the current economic activity, rose slightly to 112.1 in July from 112.0 in the previous month. The preliminary reading for the month was 112.8.

In the Asian trading today, the yen held steady against its major rivals.

In the European trading, the yen rose to nearly a 1-1/2-month high of 129.88 against the pound, a 5-week high of 72.69 against the NZ dollar and a 5-day high of 76.20 against the Canadian dollar, from early lows of 131.23, 73.21 and 76.79, respectively. If the yen extends its uptrend, it is likely to find resistance around 128.00 against the pound, 71.00 against the kiwi and 75.00 against the loonie.

Against the U.S. dollar, the Swiss franc and the Australian dollar, the yen advanced to 4-day highs of 100.51, 103.66 and 76.45 from early lows of 101.08, 104.27 and 76.98, respectively. The yen may test resistance near 99.00 against the greenback, 101.00 against the franc and 75.00 against the aussie.

The yen edged up to 112.90 against the euro, from an early low of 113.51. On the upside, 111.00 is seen as the next resistance level for the yen.

Looking ahead, U.S. new home sales data for August is slated for release in the New York session.

At 8:30 am ET, European Central Bank's member of the supervisory board, Ignazio Angeloni, speaks at a conference "Strengths and Weaknesses of European Banking" organized by Brevan Howard Centre and Imperial College Business School, in London.

At 9:00 am ET, European Central Bank President Mario Draghi will testify before the Committee on Economic and Monetary Affairs of European Parliament, in Brussels.

At 9:30 am ET, Minneapolis Fed President Neel Kashkari participates in a fireside chat moderated by Harry Melander, president of the Minnesota Building and Construction Trades Council and board member of the Federal Reserve Bank of Minneapolis, in Minneapolis, U.S.

Fifteen minutes later, European Central Bank Vice President Vitor Constancio is expected to speak at a conference, in Frankfurt.

At 11:45 am ET, Federal Reserve Governor Daniel Tarullo will deliver a speech titled "Next Steps in the Evolution of Stress Testing" at the Yale School of Management Leaders Forum, in New Haven.

At 12:00 pm ET, Austrian National Bank Governor and ECB Governing Council member Ewald Nowotny is expected to speak on the future of banks, in Vienna.

At 1:30 pm ET, Federal Reserve Bank of Dallas President Robert Kaplan will participate in moderated Q&A before the Independent Bankers Association of Texas Annual Convention in Dan Antonio.