Yen bears still in control, AUD eyes jobs data

SYDNEY Thu Apr 11, 2013 5:15am IST

A woman counts Japanese 10,000 yen notes in Tokyo, in this February 28, 2013 picture illustration. REUTERS/Shohei Miyano

A woman counts Japanese 10,000 yen notes in Tokyo, in this February 28, 2013 picture illustration.

Credit: Reuters/Shohei Miyano

SYDNEY (Reuters) - The dollar came within a hair's breadth of 100 yen early in Asia on Thursday with the Japanese currency seeing little respite in selling pressure after the Bank of Japan reiterated its resolve to pull the economy out of a deflationary funk.

The greenback bought 99.79 yen, having risen as high as 99.88. It has gained more than 7 percent on the yen since the BOJ last week unveiled a radical stimulus program that even eclipsed the Federal Reserve's own massive plan.

BOJ Governor Haruhiko Kuroda late on Wednesday signaled his readiness to offer further stimulus or maintain an ultra-easy policy beyond two years if meeting its 2-percent inflation target by then proves difficult.

Dealers said there were barriers around the 100 level, which if reached would take the greenback to highs not seen since mid-April 2009. A break there would pave the way for a test of the April 2009 peak of 101.45.

Trading was choppy overnight as the market reacted to the comments from Kuroda and minutes of the Federal Reserve's March 19-20 meeting.

The Fed has also launched an investigation into how the minutes got released early to some people. For now, it appeared to be accidental.

While the minutes were described by some analysts as having a hawkish tinge, the market largely discounted them because of the dismal March payrolls report.

In the end, investors resumed selling the yen against everything else.

"We forecast USD/JPY rising to 102 at the end of Q2, 103 at the end of Q3 and 105 at year end. Meanwhile, EUR/JPY and AUD/JPY are likely to appreciate significantly reaching 140 and 116, respectively, this year," BNP Paribas strategist Vassili Serebriakov said.

The euro climbed to 130.42 yen, having touched a fresh three-year high of 130.57. Against the greenback, the common currency hit a one-month high of $1.3122, before easing back to $1.3068.

As a result, the dollar index .DXY briefly dipped to a near three-week low.

Higher-yielding commodity currencies were among the best performers with the Australian dollar jumping to a 2-1/2 month high of $1.0553.

It was nearing its 2013 peak of $1.0599 set in January, a resistance level that could be tested if employment data for March due at 0030 GMT surprised on the upside. But after February's stunning rise of 71,500 jobs, chances are high for a corrective pullback in March.

The Aussie dollar was also supported by data on Wednesday that showed strong exports to China, Australia's single biggest customer.

Against the yen, the Aussie soared to 105.26, bringing into focus the 108.00 level that had capped its rise back in 2007.

Also on tap are Japan's machinery orders and an interest rate decision by the Bank of Korea. Analysts polled by Reuters expect the BOK to cut interest rates to 2.5 percent, from 2.75 percent, in a bid to revive growth.

(Editing by Wayne Cole)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Shares Hit Record

Sensex, Nifty rise to second consecutive record high

Sensex surges 500 points on BOJ easing, L&T gains

The BSE Sensex and Nifty surged to record highs for a second consecutive session on Friday after Bank of Japan's surprise expansion of its massive stimulus programme raised hopes for additional foreign inflows, boosting blue-chips such as Larsen & Toubro.  Full Article 

REUTERS SHOWCASE

Wilful Negligence?

Wilful Negligence?

SEBI piles pressure on Sahara to sell overseas hotels  Full Article 

Indian Economy

Indian Economy

India's fiscal deficit in H1 almost 83 pct of full-year target.  Full Article 

M&M Earnings

M&M Earnings

M&M Q2 net profit down 4 percent, hit by poor monsoon.  Full Article 

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage