* Dollar stalls just before 100 yen, euro before 130 yen
* Yen recovers after hitting near 4-year low versus dollar
* Option barrier at 100 yen to act as hurdle
* Yen falls seen temporary after aggressive BOJ easing
By Anooja Debnath
LONDON, April 9 The dollar hit a four-year high
against the yen on Tuesday, stalling just shy of the 100 mark
and tipped to rise further, though it could face some resistance
given the rapid pace of its ascent.
Analysts said option barriers at 100 yen and traders taking
profits has slowed the yen's fall, but it was only a matter of
time before it broke lower again following the aggressive easing
measures announced last week by the Bank of Japan.
The dollar was last down 0.4 percent on the day at 98.98 yen
, having earlier risen as far as 99.67 yen, its highest
since May 2009.
"There is a likelihood we could hit 100 yen relatively soon
after the BoJ's massive stimulus move," said Saeed Amen, FX
strategist at Nomura.
"The risks are to the upside for dollar/yen but there are
options barriers around the 100 yen level which need to go out
so it could take some time... perhaps within the next week."
Traders also cited strong demand to take profit on dollar
gains ahead of around 99.73 yen, the 50 percent retracement of
the dollar's fall from the June 2007 peak of 124.14 yen to a
record low of 75.311 set in October 2011.
Since BOJ Governor Haruhiko Kuroda promised on Thursday to
inject about $1.4 trillion into the economy in less than two
years, the dollar has gained more than 7 percent against the yen
while Japanese stocks have jumped.
The euro hit 129.935 yen on the EBS trading
platform, its highest since January 2010, before stalling just
shy of 130. It last traded down 0.2 percent at 129.06 yen.
Traders said large stop-loss buy orders would be triggered
if the euro broke through 130 yen.
Japanese Finance Minister Taro Aso said on Tuesday that the
yen was undergoing a correction from previous "excessive" rises,
though he stressed the country's monetary policy was aimed at
beating deflation not weakening the yen.
Dollar/yen one-month risk reversals, a measure
of the relative demand for bets on the dollar rising against the
yen over bets on it falling, have risen to around 0.7 in favour
of yen puts since the BOJ announcement.
With the dollar stalling ahead of the 100 yen mark, however,
risk reversals have dropped back to around 0.5 in favour of yen
puts. But analysts said this pause was temporary.
"Dollar/yen has moved so quickly it is bound to have
setbacks ahead of key levels, so I am not surprised it is not
just flying through the 100 mark," said Niels Christensen,
currency strategist at Nordea in Copenhagen.
"(But).. everything is pointing to a weaker yen and everyone
is happy to go with the flow."
The euro was up 0.3 percent at $1.3043, having hit a
three-week high of $1.3068 earlier after stop-loss buying was
triggered near $1.3050.
Analysts said the euro was helped by its strong rise against
the yen and by more positive sentiment sparked by gains in
Concerns about the euro zone - the bailout for Cyprus,
political uncertainty in Italy and Spain's struggling fiscal and
economic conditions - seem to have taken a back seat for now,
Rating's agency Moody's warned on Tuesday that prospects of
Spain missing its public deficit target this year could see its
sovereign credit rating slip below investment grade.
Higher-yielding commodity currencies, which tend to benefit
when equities rise, hit multi-year highs against the yen.
The Australian dollar hit its highest since July 2008 at
103.81 yen and the New Zealand dollar rose to its
highest since February 2008 at 84.49 yen.