The yen remained weak as the Reserve Bank of Australia's (RBA) decision overnight not to raise interest rates failed to dent the carry trade, with a rate hike in May still fully expected. A carry trade is where investors borrow in low-yielding currencies such as the yen in order to invest in higher-yielding assets elsewhere. The popularity for this type of trade has been boosted by expectations that rates in countries with high interest rates such as Australia and the UK will rise while staying static in areas with low rates such as Japan and Switzerland. Though there was some disappointment the RBA left rates on hold at 6.25 pct, given the recent very strong data out of Australia a rate hike in May will now be seen as all but a certainty. Falls in the Australian dollar following the decision were therefore short-lived. "The market reaction, with the Australian dollar lower then recovering quickly, shows that most believe the RBA has merely delayed the inevitable and that rates will be raised in May," said Daragh Maher at Calyon. Though off its recent highs, the currency remains very strong and close to the 10-year peaks reached in recent days. Meanwhile, higher equity markets and solid risk appetite also weighed on the yen, with analysts also pointing to Japanese institutional investors returning to the market to sell yen at the start of the fiscal year. "The yen trades in reverse to global risk appetite and as long as equity markets rally the yen has little chance to recover," analysts at BNP Paribas said. Elsewhere, the pound remained firm, though was off yesterday's highs when the currency hit two-month highs against the dollar. Market players remain on alert to the risk that the Bank of England may raise interest rates tomorrow and the pound is likely to remain well-supported. For today, focus will centre on the release of services sector PMI surveys for the euro zone and the UK.