* Euro hits two-week high after ECB policy statement
* Draghi eyed for further clues
* Yen holds gains amid doubts over BOJ policy
* Aussie edges up after Chinese trade data
By Jemima Kelly
LONDON, Sept 8 The euro hit a two-week high on
Thursday after the European Central Banks left interest rates
unchanged and stopped short of a formal commitment to further
expand its huge asset-purchase programme.
The ECB repeated that it would only extend its 1.74 trillion
euro asset purchase programme - intended to run until the end of
March 2017 - if necessary, until it sees a sustained adjustment
in the path of inflation consistent with its inflation target.
The decision to leave rates on hold was expected by almost
all 70 analysts polled by Reuters but a sizable minority also
expected an extension of the asset buys.
The euro gained 0.7 percent on the day to hit $1.1316
after the policy statement, its strongest since Aug. 26. The
dollar also hit a two-week low of 94.514 against a basket of
"The bank does not mind holding back with respect to (using)
more aggressive measures, but the (bigger) question is how long
they can afford to wait given that they are very late in the
game of QE," said ThinkMarkets analyst Naeem Aslam.
Traders expected relatively little from a news conference by
ECB chief Mario Draghi beginning at 1230 GMT.
"The bar is very, very high for Draghi to be able to deliver
any sort of dovish surprise here," said ING currency strategist
Viraj Patel, from London. "It's really difficult to see him
driving the euro lower."
"Our idea is that it's going to be a repeat of what we saw
in May, with a Draghi disappointment - that's the balance of
risks," he added.
The euro is barely 3 percent weaker against the dollar than
when the bond-purchase programme was first announced, in January
2015, and it is up almost 4 percent this year.
The yen edged up 0.2 percent against the dollar to
101.62 yen, clinging to gains of almost 3 percent made in the
last four days, after a Bank of Japan deputy governor gave few
fresh clues on whether the central bank will expand its monetary
stimulus this month.
Analysts said the comments by BOJ Deputy Governor Hiroshi
Nakaso seemed similar in tone to remarks by BOJ Governor
Haruhiko Kuroda earlier this week, which acknowledged the costs
of the BOJ's aggressive stimulus.
"The main message doesn't seem all that different ... The
general tone of weighing the costs and benefits were in Governor
Kuroda's comments as well," said Shinichiro Kadota, senior FX
and yen rates strategist for Barclays in Tokyo.
Data showing that China's imports unexpectedly rose in
August for the first time in nearly two years helped lend
support to the Australian dollar, which rose half a percent to
hit a three-week high of $0.7716.
For Reuters new Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Masayuki Kitano in Singapore and
Hideyuki Sano in Tokyo, editing by Larry King and Hugh Lawson)