* Dollar/yen rises to 9-day high
* Focus shifts back to US stimulus after Trump's tax vow
* US-Japan summit awaited, with focus on currency talks
By Shinichi Saoshiro
TOKYO, Feb 10 The dollar stood atop large gains
early on Friday after soaring broadly overnight on comments by
U.S. President Donald Trump that he would announce the most
ambitious tax reform plan since the Reagan era in the next few
The dollar had enjoyed a big surge after Trump won the U.S.
elections in November on pledges to inject the economy with
large-scale fiscal stimulus. But the "Trump rally" had faded
over the past few weeks with more focus on the new president's
protectionist trade rhetoric and his support for a weaker
The dollar index against a basket of major currencies was up
0.1 percent at 100.710, its highest in three days. The
index was poised to rise 0.8 percent on the week.
The U.S. currency received a boost as Trump promised a
"phenomenal" tax plan in a White House meeting on Thursday with
airline executives, although he did not offer specifics other
than citing the need to a lower tax burden on businesses.
The euro was steady at $1.0657 after losing 0.4
percent the previous day. The common currency was on track to
shed more than 1 percent on the week, during which it was dogged
by perceived political risks facing the euro zone.
The dollar extended its overnight rally and edged up to a
nine-day high of 113.665 yen.
The greenback soared 1.2 percent against the yen the
previous day as U.S. Treasury yields rose sharply in the wake of
Trump's comments. Treasury yields had until Thursday declined
steadily to multi-week lows, pushing the dollar to a 10-week
trough of 111.590 yen.
"Recently, the dollar has been caught between uncertainty
towards Bank of Japan policy and U.S.-Japan currency diplomacy
on one hand, and hopes for U.S. tax reform on the other. The
dollar's surge was straightforward reaction to developments in
the latter," said Shusuke Yamada, chief Japan FX strategist at
BOA Merrill Lynch.
Market focus turned to the two-day summit between President
Trump and Japanese Prime Minister Shinzo Abe starting later on
Of concern to rejuvenated dollar bulls is the possibility of
Trump reiterating his opposition to a strong dollar, and the
financial markets are paying particular attention to how much
currency policies are discussed at the summit.
Trump and his top trade adviser Peter Navarro criticised
Germany, Japan and China last week, saying the trading partners
were engaged in devaluing their currencies to the disadvantage
of the United States.
"Currency policy may not be a dominant topic at the summit,
and that would be positive for the dollar," Yamada at BOA
Merrill Lynch said.
A senior U.S. official said while currency manipulation
could come up in the talks, it was not at the top of Trump's
list of topics at the summit.
Elsewhere, the New Zealand dollar inched up 0.1 percent to
$0.7189, stabilising somewhat after sliding 1.1 percent
the previous day as the country's central bank extinguished
hopes that a rate hike would happen sooner rather than later.
(Editing by Sam Holmes)