* Dollar/yen pares earlier losses and edges higher
* Yen not far from previous day's 2-1/2 year low vs dollar
* Firmness in regional equities weighs on yen
By Masayuki Kitano
SINGAPORE, Jan 29 The yen on Tuesday slipped
back toward a 2 1/2 year low struck a day earlier against the
dollar, hurt by signs of upbeat sentiment toward risky assets,
while the Australian dollar rose on data showing a rebound in
Australian business confidence.
The dollar rose 0.1 percent against the yen to 90.99 yen
, not very far from the previous day's high of 91.26 yen,
the greenback's strongest level versus the Japanese currency
since June 2010.
The greenback fell as low as 90.40 yen earlier, pressured by
dollar-selling, possibly from Japanese exporters, ahead of the
0100 GMT Tokyo fixing. Traders also cited dollar offers from
The dollar however, later turned higher versus the yen as
Asian equities and Tokyo shares bounced, traders said, adding
that the greenback's uptrend versus the yen looked intact.
"I still think dollar/yen will head higher," said a trader
for a European bank in Tokyo. "In the near term, I think the
dollar will trade between 90 yen to 92 yen," he said.
Selling the yen has been a one-way trade since mid-November,
based on expectations that Japanese Prime Minister Shinzo Abe
would push the Bank of Japan into more forceful monetary easing
to beat deflation.
"Everyone is only thinking about where to buy (the dollar)
on dips," said a trader for a Japanese bank in Bangkok,
referring to the dollar versus the yen.
The Australian dollar rose 0.2 percent to $1.0438,
getting a boost after a survey showed that Australian business
confidence rebounded sharply in December.
The euro rose 0.1 percent versus the yen to about 122.32 yen
, not far from Monday's high near 122.90 yen, the
euro's strongest level against the Japanese currency since April
Against the dollar, the single currency held steady at
$1.3452, hovering close to an 11-month high of $1.3480
set on Friday on trading platform EBS.
The euro had gained a boost late last week on news about
euro zone banks' early repayments of three-year loans to the
European Central Bank, which suggested that parts of the euro
zone banking system may be on the mend.
The euro, however, faces a series of major resistance levels
near $1.35, including its 2012 high of $1.34869, the 50 percent
retracement of its May 2011 to July 2012 drop near $1.3491, and
the psychologically important $1.3500 level.
Sterling held steady at $1.5700, having hit a
five-month low of $1.5675 on Monday.
Sterling has been weighed down by worries about a weak UK
economy and prospects of more monetary easing by the Bank of
"The prospect of more activist monetary policy is not
exactly an encouraging one for GBP, certainly not as it comes on
top of a host of other negative developments - an economy that
is triple-dipping, a government that is struggling to cut its
deficit, and soul-searching about the UK's role within the EU,"
wrote analysts at JPMorgan in a note.