* Loonie, Mexican peso bounce as Trump says won't scrap
* US tax plan offers no surprises, dollar/yen slips off 4-wk
* ECB awaited after 1st round of French votes, Riksbank also
* BOJ stands pat on policy as expected, little impact on yen
(Updates prices, adds details and quotes)
By Shinichi Saoshiro
TOKYO, April 27 The dollar held gains against
the yen on Thursday after U.S. President Donald Trump's tax plan
offered no fresh surprises, slowing the greenback's rally, while
the market awaited the European Central Bank's upcoming monetary
The Canadian dollar and Mexican peso, which had slumped
earlier on reports the United States is considering withdrawing
from the North American Free Trade Agreement (NAFTA), bounced
sharply after Trump said he would not scrap the pact but
Against the Japanese yen, the dollar had surged to a
four-week high of 111.780 overnight before the unveiling of
Trump's tax reform plan, but it lost traction as it failed to
excite investors. The dollar was last up 0.15 percent at 111.220
The yen showed little reaction to the Bank of Japan's
decision on Thursday to keep monetary policy steady as the
outcome was well anticipated.
Trump's plan would cut the income tax rate paid by public
corporations to 15 percent from 35 percent and reduce the top
tax rate assessed on pass-through businesses, including small
partnerships and sole proprietorships, to 15 percent from 39.6
"The Trump tax plan did not go beyond what the media had
been reporting all week. And while the plan appears ambitious,
its foundations are shaky from a revenue perspective," said
Junichi Ishikawa, senior forex strategist at IG Securities in
"Participants have become wary of pushing the dollar further
under such conditions."
The euro was up 0.1 percent at $1.0913.
The euro has had a buoyant week, climbing to a 5-1/2 month
high of $1.0951 on Wednesday, as the first round of the French
presidential elections held over the weekend reduced perceived
risk towards the common currency.
The single currency has also soared against the safe-haven
yen, which has broadly retreated this week as risk aversion has
ebbed on the back of the French election results. The euro was
at 121.445 yen after climbing overnight to a five-week
peak of 121.980.
Another factor spurring gains for the euro this week has
been expectations of a change in the direction of ECB policy in
coming months, that it would soon scale back monetary stimulus.
The central bank is due to announce its policy decision
later on Thursday and the focus is on whether the recent French
election results, which favour a pro-euro centrist, had any
impact in the ECB's stance.
"The euro has been gaining against the dollar and yen amid
expectations of the ECB signalling policy tapering. So it could
go temporarily on the defensive if the central bank does not
deliver any tapering signals," said Shusuke Yamada, a senior
strategist at Bank of America Merrill Lynch in Tokyo.
Sweden's central bank also makes a rates decision on
Thursday, and while the Riksbank is widely expected to stand
pat, investors will be looking for any hawkish signals after
recent signs of strength in the domestic economy.
The Canadian dollar bounced 0.6 percent to C$1.3542
per dollar. The loonie had initially weakened to a 14-month low
of C$1.3636 after a senior administration official said
on Wednesday that Trump is considering issuing an executive
order to pull the United States from NAFTA.
The Mexican currency strengthened 1.2 percent to
18.95 pesos per dollar after sinking to a more than one-month
low of 19.29 overnight.
Antipodean currencies also rose as Trump's latest stance on
NAFTA eased concerns towards U.S. trade protectionism for now.
The Australian dollar was a shade higher at $0.7489
after retreating to a three-month low of $0.7455 the previous
day on lacklustre local inflation data. The New Zealand dollar
added 0.4 percent to $0.6920, pulling back from a
four-month low of $0.6873 plumbed overnight.
The dollar index against a basket of major currencies
slipped 0.2 percent to 98.844 after rising to 99.332 the
(Editing by Jacqueline Wong)