Headlines: Investors are looking for the release of the trade balance in Japan
Main news:
- Gold future contracts heading up
- Important data will be published today in Canada
Forex outlook:
The yen inched towards a record low against the euro on Tuesday, pressured by expectations that the Bank of Japan will raise interest rates only slowly.
The yen had got a brief lift after BOJ Deputy Governor Toshiro Muto told Jiji news agency that the timing of when the central bank next raises interest rates was completely open, including at its policy board meeting in December.
A senior dealer at a foreign investment bank said that Muto's comments left open the chances of a rate rise next month and were a "bit of a positive surprise" for the yen.
But the market impact was subdued since traders think that even if the BOJ were to bump up rates before year-end, any subsequent rises would likely occur only gradually, said Hiroki Shimazu, market economist for Mizuho Securities.
Many traders expect the Bank of Japan to raise rates by 25 basis points to 0.50 percent in the January-March quarter, while some see a chance of a rise next month.
The market will likely focus on comments from European Central Bank President Jean-Claude Trichet, who is slated to hold a news conference later in the day.
Trichet said on Monday that the ECB has to be strongly vigilant on inflation risks, the typical signal that interest rates are set to climb, which propped up the euro.
GOLD
Gold future contracts headed up as platinum futures rose 1.8 percent on Tuesday as speculative buying caused a jump in borrowing costs and forced some funds buy back the illiquid metal, helping send the cash price to a record high.
"Short supply, highly possibly caused by a big player or players cornering in the cash market, triggered a panic-type chain of buying," the manager said, adding that the shortage was being reflected in a sudden jump in the lease rate.
"We are seeing the sharp moves because the market is relatively small. A reasonable amount of purchases by funds could boost prices this way," said Hisaaki
CRUDE OIL
U.S. crude oil futures ended down but well above the session low on Monday as new front-month contract January debuted in a market perceived to be well supplied and after the December contract expired on Friday.
Refinery snag news helped products bounce and finish higher on the day, helping crude futures bounce off the low.
The supply/demand balance has OPEC mulling another production cut when the group meets in Nigeria on Dec. 14, on top of the 1.2 million barrel per day cut members agreed to implement starting in November.
