Asia Recap: Yen strength persists

FXstreet.com (Bali) - The dominant theme in Asia was the consistent buying interest towards the Japanese Yen, with a major 2% slide in the Nikkei 225 the main drag, as larger flows (Japanese mega banks back from holidays) returned to the market.

The Australian Dollar, despite not finding support by a downbeat HSBC China Services PMI (50.5 vs 52.5) coupled with the latest Moody's warning on China's excessive local government debt - credit negative threat -, contained selling flows kicking in ahead of 0.90, by simply returning to its daily flat line around 0.8950/60.

Meanwhile, the British Pound traded on a weak note throughout the sessions, with some additional profit-taking being noted after the long-lasting bullish run from Q4 2013, as the market grows optimistic about higher rates in the UK later this year.

Key headlines in Asia

Australia: AiG Performance of Services Index (December): 46.1 vs 48.9

BoC to face pressure to raise rates in 2014 - Canadian FinMin

Coming up this week: ECB, BoE, US NFP

China: HSBC China Services PMI (December): 50.9 vs 52.5

USD/JPY feels the pain

Moody's warns risk of ballooning debt from China's local govts