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Forex pairs in this Article » EUR/USD, GBP/USD, USD/JPY (Bali) - The Australian Dollar was the star in Asia, with hotter-than-expected CPI figures washing away any hopes of further rate cuts by the RBA near-term.

The reaction by market participants was to readjust the Australian OIS pricing, going from expectations of 6bps of cuts in the next 12 months, to currently price 5 basis points of rate hikes.

As per the Yen, a better tone was observed post the BOJ decision, which left its monetary policy unchanged, while maintainign its optimism towards inflation targets and prospects on the economy, despite the central bank downgraded projections, seeing growth of 1.4% for the fiscal year 2014 vs 1.5% in the last assessment.

The Euro tried its luck after topside stops above 1.3570 were done, yet an abrupt rotation sent the rate back towards 1.3555/60 ahead of the European session. The Pound traded very quiet with most traders sidelined ahead of the UK jobs report/BoE minutes.

Main headlines in Asia

Australia: Westpac Consumer Confidence (January): -1.7%

Australian inflation picking up more than RBA may wish

Japanese foreign investment flow more JPY negative - Nomura

Australian CPI to change the RBA game plan?

Near-term RBA rate cuts out of the picture - Nomura

Risk of RBA rate cut fading - UBS

Another RBA rate cut in Q2 expected - RBC

BoJ: Policy, CPI forecast unchanged; GDP downgrade
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