The yen fell versus all of its major counterparts on expectations the Bank of Japan (8301) will accede to government pressure to expand monetary easing that tends to weaken the currency. The yen declined versus the dollar and euro ahead of data this week that may show Japan had a current-account deficit in November, supporting the case for increased stimulus at the central bank’s next meeting. The euro stemmed a loss from yesterday on prospects European Central Bank officials meeting tomorrow will refrain from lowering borrowing costs. The Australian dollar slid against most peers after data showed that retail sales and job vacancies unexpectedly declined. “The yen-weakness trend hasn’t changed yet,� said Yoshiko Takayasu, the Tokyo-based head of corporate sales for National Australia Bank Ltd. “There’s a good chance the yen will go a little lower as the Japanese government is expected to announce economic measures and the BOJ holds a meeting.� Japan’s currency dropped 0.4 percent to 87.41 per dollar as of 1:45 p.m. in Tokyo after rising 1.3 percent in the previous two days. It fell 0.4 percent to 114.28 per euro. Europe’s shared currency bought $1.3072 after falling 0.3 percent to $1.3081 yesterday. Japan’s Chief Cabinet Secretary Yoshihide Suga said today the next BOJ governor should see the need for bold monetary easing. Current Governor Masaaki Shirakawa is set to end a five- year term on April 8, while his deputies Hirohide Yamaguchi and Kiyohiko Nishimura exit in March. Bond Purchases Newly elected Prime Minister Shinzo Abe has called for a doubling of the BOJ’s 1 percent inflation goal to reverse more than a decade of deflation. Finance Minister Taro Aso said yesterday Japan plans to use its foreign-exchange reserves to buy bonds issued by the European Stability Mechanism and euro- area sovereigns, as the nation seeks to weaken its currency. A Jan. 11 report will probably show Japan had a current- account deficit of 17.1 billion yen ($196 million) in November from a surplus of 376.9 billion yen in the previous month, according to a Bloomberg News survey of economists. BOJ policy makers next meet on Jan. 21-22, after boosting stimulus and refraining from altering their price-gain measure at their December gathering. The yen has tumbled 6.6 percent over the past month, the worst performer among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar weakened 0.4 percent, while the euro gained 0.9 percent. ECB Meeting ECB President Mario Draghi and his board will probably keep the euro-area’s benchmark borrowing cost unchanged at 0.75 percent, according to the median estimate in a Bloomberg survey of economists before the policy decision tomorrow. Analysts in a separate poll predicted that German data today will show industrial production climbed 1 percent in November from a month earlier, when it dropped 2.6 percent. “There’s not that same concern about the downside risk or a potential contagion� in Europe, said Sacha Tihanyi, a Hong Kong-based senior currency strategist at Scotiabank. “The euro’s not going to be plunging, but there’s no real reason to be overly bullish either.� Australia’s statistics bureau said today that retail sales fell 0.1 percent in November from the previous month, when they stalled. The median estimate of analysts in a Bloomberg survey was for a 0.3 percent advance. Job vacancies dropped 6.9 percent over the same period, according to a separate report. “The Aussie is struggling to rise,� said Satoshi Okagawa, a senior global markets analyst in Singapore at Sumitomo Mitsui Banking Corp., a unit of Japan’s second-biggest financial group by market value. “I can’t see an immediate pickup in corporate confidence or retail sales.� The Australian dollar lost 0.1 percent to $1.0496. To contact the reporters on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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