00:00Japan Bank holiday-

00:30Australia Private Sector Credit, m/mNovember +0.1%+0.3%+0.4%

00:30Australia Private Sector Credit, y/yNovember +3.8%+3.7%+3.5%

01:45China HSBC Manufacturing PMI(finally)December 50.950.951.5

The yen is set to close out its biggest annual decline in seven years amid speculation the Bank of Japan  will increase cash provisions to stoke inflation, debasing the currency. BOJ Governor Masaaki Shirakawa said the central bank and the government must work together to end deflation, the Nikkei newspaper reported, citing him in an interview. The BOJ will hold its first 2013 policy meeting on Jan. 21-22 when it releases updates on its growth and consumer-price forecasts. Shirakawa said the BOJ will discuss details of an inflation target requested by newly installed Prime Minister Shinzo Abe at the meeting, according to the Nikkei newspaper.

Australia’s dollar climbed against most of its major counterparts after a private report showed manufacturing grew at the fastest pace in 19 months in China, the nation’s biggest trading partner. The final reading for a Chinese manufacturing gauge by HSBC Holdings Plc and Markit Economics showed the index was at 51.5 this month, the highest since May 2011 and above the reading of 50 that indicates expansion. China is Australia’s biggest trading partner.

Investors are weighing whether U.S. leaders can avert more than $600 billion in tax increases and spending cuts, known as the fiscal cliff that’s set to take effect next month. Senate Majority Leader Harry Reid said the chamber will resume work today and that he hopes the Senate will have further announcements even as there are still “significant differences” among the parties involved.

Japan’s financial markets are shut today for a national holiday and there’ll be no trade in major markets tomorrow.

EUR/USD: during the Asian session the pair fell to $1.3185.

GBP/USD: during the Asian session the pair fell to $1.6150.

USD/JPY: during the Asian session, the pair traded around Y86.00.