The USD/JPY pair gains momentum to a two-week high near 157.00 during the early Asian session on Friday. The Japanese Yen (JPY) remains under selling pressure against the US Dollar (USD) ahead of Japan's snap general election on Sunday.

The Euro extends its losses on Thursday as the European Central Bank held rates unchanged in an uneventful monetary policy decision. Jobs data in the United States was softer than expected fueling speculation for rate cuts by the Federal Reserve. The EUR/USD trades at 1.1777, down 0.25%.

Lee Hardman, Senior Currency Analyst at MUFG, notes the impact of Japan's election risk on the Japanese Yen. The USD/JPY has risen above the 157.00-level, driven by expectations that the ruling coalition will strengthen its majority.

Spot Silver markets took a fresh beating on Thursday, with XAG/USD tumbling 13% in a single day. Intraday Silver bids have been pushed back onto the bottom end of a 40% peak-to-trough decline that dragged Silver prices sharply down from record highs posted at $121.66 just last week.

Financial markets revolved around European central banks’ monetary policy decisions.

The Canadian Dollar (CAD) shed some scant weight against the US Dollar (USD) on Thursday, backsliding a slim 0.05%.

Societe Generale's report outlines the outlook for the Mexican Peso (MXN), indicating that Banxico is expected to maintain the policy rate at 7.00%. It highlights the central bank's cautious approach and the criticism it faces for lowering rates before achieving inflation convergence.

AUD/USD trades lower on Thursday and is hovering around 0.6965 at the time of writing, down 0.45% on the day.

ING analysts Min Joo Kang, Chris Turner, and Padhraic Garvey provide insights into the upcoming Japanese election and its implications for the economy, bonds, and the Yen.

MUFG's report, authored by Lee Hardman, Senior Currency Analyst, addresses the recent strength of the Swedish Krona and the Riksbank's response. Following strong gains, the Riksbank has expressed concern over the potential for disinflation risks due to the strengthening Krona.

EUR/CAD trades around 1.6130 on Thursday at the time of writing, virtually unchanged on the day, as markets digest the European Central Bank’s (ECB) policy decision and monitor Canada-specific factors.

The Pound Sterling collapses versus the US Dollar after the Bank of England decided to hold rates but opened the door for further easing, in a decision seen as a “dovish hold.” Worse than expected US jobs data failed to halt the GBP/USD downfall, trades at 1.3529 down 0.90%.

EUR/USD trades around 1.1800 on Thursday at the time of writing, virtually unchanged on the day, as investors digest the European Central Bank’s (ECB) decision and a series of mixed economic releases from the United States (US).

GBP/JPY trades around 212.70 on Thursday at the time of writing, down 0.70% on the day, as Pound Sterling (GBP) comes under strong pressure following the Bank of England’s policy announcement.

EUR/JPY trades around 185.40 on Thursday at the time of writing, up 0.10% on the day. The cross is mainly supported by the underperformance of the Japanese Yen, amid rising political uncertainty in Japan, while the Euro shows a more mixed profile due to conflicting macroeconomic signals.

The Euro (EUR) is drawing support for a weaker British Pound (GBP) on Thursday, following the Bank of England’s (BoE) monetary policy decision. The pair has jumped to a fresh one-week high beyond 0.8700, from the 0.8660 area.

According to TD Securities, the European Central Bank is anticipated to keep the deposit facility rate at 2.00% with no significant changes in its communication.

The US Dollar (USD) appreciates for the second consecutive day against the Canadian Dollar (CAD). Bulls have failed to find acceptance above 1.3700 earlier on the day, but the pair remains bid, trading at 1.3685, with the safe-haven USD favoured by the dismal market mood.

The British Pound and gilts have declined sharply due to political uncertainty surrounding Prime Minister Keir Starmer's leadership.

The USD/JPY extends its winning streak for the fifth trading day on Thursday, trades 0.26% higher to near 156.20. The pair advances further due to continued outperformance from the US Dollar (USD).

EUR/GBP trades around 0.8670 on Thursday at the time of writing, up 0.30% on the day, supported by some weakness in the Pound Sterling (GBP) ahead of the Bank of England’s (BoE) monetary policy decision, which is due later in the day, despite mixed economic indicators from the Eurozone.

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The upcoming Lower House election in Japan on February 8 is expected to have significant implications for the USD/JPY exchange rate. TD Securities analysts predict that if the ruling Liberal Democratic Party (LDP) secures an absolute majority, USDJPY could rise towards 160.

The US Dollar is flat against the Swiss Franc on Thursday, trading around 0.7780 at the time of writing.

Eurozone Retail Sales, a key measure of consumer spending, declines 0.5% month-on-month (MoM) in December, faster than estimates of 0.2% fall. In November, the consumer spending measure rose by 0.1%, revised lower from 0.2%.

Eurozone Retail Sales (MoM) came in at -0.5% below forecasts (-0.2%) in December

Eurozone Retail Sales (YoY) below expectations (1.6%) in December: Actual (1.3%)

The report from OCBC Bank discusses the ongoing weakness of the JPY amid fiscal uncertainty ahead of Japan's election on February 8. The contrasting behavior of JGB yields suggests differing interpretations among investors regarding Japan's fiscal outlook.

MUFG Senior Currency Analyst Lee Hardman discusses the upcoming ECB policy meeting and its implications for the Euro. The EUR/USD has dipped below the 1.1800-level after reaching a high of 1.2081 last week.

The Euro is practically flat on Thursday, trading around 1.1800 at the time of writing after bouncing from levels near two-week lows, at 1.1777.