* Yen undermined by speculation of more BOJ easing
* Dollar supported after upbeat U.S. job, service-sector
* Euro stuck in range as market looks to when Spain asks for
* ECB seen on hold this time, eyes on Spanish bond auction
* Aussie hits 1-month low after retail sales data
By Ian Chua and Hideyuki Sano
SYDNEY/TOKYO, Oct 4 The yen struggled at
two-week lows against the dollar on Thursday, with wary
speculators taking a pre-emptive move just in case the Bank of
Japan surprises this week by easing policy.
The market also gave the Australian dollar a wide berth, but
left the euro pretty much alone against the greenback as
investors waited for the outcome of the European Central Bank
meeting due at 1145 GMT.
The dollar bought 78.47 yen, flat from late U.S,
levels but not far from Wednesday's high of 78.585, a level last
seen on Sept. 19. The euro fetched 101.38 yen, not
far off a peak of 101.46 set overnight.
The BOJ, which only last month boosted its asset-buying
programme, has been under intense political pressure to offer
more stimulus to spur growth and weaken the yen.
Analysts generally expect the BOJ to stand pat at the Oct.
4-5 meeting to gauge the effects of its latest easing, but
pressure is expected to stay on ahead of its next policy meeting
on Oct 30 when it will also have an economic review.
Economy Minister Seiji Maehara said on Wednesday he would
like to talk to the BOJ to push the central bank to achieve its
de facto inflation target, noting he is entitled to attend the
BOJ's policy meeting if he wants to.
"It may take a while before the BOJ will actually do
something. Still, market players are speculating about more
easing and you have to consider which side of position you
should take under such conditions," said Katsunori Kitakura,
associate general manager of market making at Sumitomo Mitsui
The U.S. currency was also helped by fairly upbeat U.S.
economic data on Wednesday, including larger-than-expected
increase in private-sector jobs and improvement in the service
The dollar's index against a basket of currencies held at
79.90, flat on the day but not far from three-week high
of 80.147 hit on Monday.
REAL MOVER IN MADRID
Against the greenback, the euro was at $1.2914,
almost unchanged from late U.S. levels and stuck in a
$1.2800/3000 range as investors look to when Spain will seek a
bailout and trigger the ECB's recently announced bond-buying
The European Central Bank is expected to hold interest rates
when it meets on Thursday to allow time for new details on the
health of the euro zone economy and for Spain to ask for aid.
"With very little expected for this ECB meeting, the real
market mover for the euro may be the Spanish bond auctions,"
said Mary Nicola, a strategist at BNP Paribas.
"Today's Spanish bond auctions will provide a litmus test for
the market's perception on Spain."
Madrid is looking to raise up to 4 billion euros ($5.2
billion) by selling three bonds maturing 2014, 2015 and 2017.
The euro hit a fresh 3 1/2-month high against the Australian
dollar, which is also slipping near last month's trough against
the U.S. dollar.
The Aussie slipped after data showed Australian retail sales
edged up only marginally in August, although it was not far from
Mounting signs of slowdown in China, Australia's main trade
partner, prompted Australia's central bank to cut interest rates
this week and leave the door ajar for more.
This had given investors the greenlight to sell the Aussie
dollar, which fell further to a fresh one-month low of $1.0182
. It last stood at $1.0195, down 0.2 percent.
While its Sept low of $1.0165 is seen as a strong resistance
level, a break there is likely to open the way for a test of
parity against the dollar.