The yen was firmer against major currencies, on continued moves out high-yielding currencies as the Bank of Japan prepares to begin raising interest rates, and benefiting from Japanese investors repatriating funds ahead of the end of the fiscal year on March 31. This week will see the release of Japanese retail sales data on Wednesday, industrial production on Thursday, and labour market and inflation numbers on Friday, which should confirm that the country is emerging out of deflation. Today has also seen continued falls in the New Zealand and Australian dollars, which have benefited the yen as investors move out of high-yielding currencies. "The yen continued to strengthen this morning at the expense of high yielding currencies such as Australian and New Zealand dollars as well as the US dollar," said Daniel Katzive at UBS. The currency has seen sharp falls recently as weak data and a surging current account deficit raise fears that the Reserve Bank of New Zealand will have to reverse its monetary tightening policy and start cutting rates. "Just as the prospect of the country's interest rate cycle going into reverse is now being considered by some to be a real possibility, deficit issues could well return to the fore over the months ahead; and should this indeed prove to be the case, then the New Zealand dollar's losses seem destined to mount," said Neil Mellor at the Bank of New York. Figures released last week showed the New Zealand current account deficit surged to a record 13.7 bln nzd in 2005 to reach an all-time high of 8.9 pct of GDP, officials said. Elsewhere, the dollar inched higher against the euro, though remained weak, with the European currency staying comfortably above the 1.20 usd mark as investors await tomorrow's interest rate decision in the US. A further 25 basis point hike in the Fed Funds rate to 4.75 pct is fully expected tomorrow evening and as ever, attention will focus on the FOMC's accompanying statement for clues on whether any further hikes will be forthcoming.