Yen bears still in control, AUD eyes jobs data

SYDNEY Thu Apr 11, 2013 12:33am BST

1 of 2. A U.S. one-hundred dollar bill (C) and Japanese 10,000 yen notes are spread in Tokyo, in this February 28, 2013 picture illustration.

Credit: Reuters/Shohei Miyano

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SYDNEY (Reuters) - The dollar came within a hair's breadth of 100 yen early in Asia on Thursday with the Japanese currency seeing little respite in selling pressure after the Bank of Japan reiterated its resolve to pull the economy out of a deflationary funk.

The greenback bought 99.79 yen, having risen as high as 99.88. It has gained more than 7 percent on the yen since the BOJ last week unveiled a radical stimulus programme that even eclipsed the Federal Reserve's own massive plan.

BOJ Governor Haruhiko Kuroda late on Wednesday signalled his readiness to offer further stimulus or maintain an ultra-easy policy beyond two years if meeting its 2-percent inflation target by then proves difficult.

Dealers said there were barriers around the 100 level, which if reached would take the greenback to highs not seen since mid-April 2009. A break there would pave the way for a test of the April 2009 peak of 101.45.

Trading was choppy overnight as the market reacted to the comments from Kuroda and minutes of the Federal Reserve's March 19-20 meeting.

The Fed has also launched an investigation into how the minutes got released early to some people. For now, it appeared to be accidental.

While the minutes were described by some analysts as having a hawkish tinge, the market largely discounted them because of the dismal March payrolls report.

In the end, investors resumed selling the yen against everything else.

"We forecast USD/JPY rising to 102 at the end of Q2, 103 at the end of Q3 and 105 at year end. Meanwhile, EUR/JPY and AUD/JPY are likely to appreciate significantly reaching 140 and 116, respectively, this year," BNP Paribas strategist Vassili Serebriakov said.

The euro climbed to 130.42 yen, having touched a fresh three-year high of 130.57. Against the greenback, the common currency hit a one-month high of $1.3122 (8564 pence), before easing back to $1.3068 (8528 pence).

As a result, the dollar index briefly dipped to a near three-week low.

Higher-yielding commodity currencies were among the best performers with the Australian dollar jumping to a 2-1/2 month high of $1.0553.

It was nearing its 2013 peak of $1.0599 set in January, a resistance level that could be tested if employment data for March due at 0030 GMT surprised on the upside. But after February's stunning rise of 71,500 jobs, chances are high for a corrective pullback in March.

The Aussie dollar was also supported by data on Wednesday that showed strong exports to China, Australia's single biggest customer.

Against the yen, the Aussie soared to 105.26, bringing into focus the 108.00 level that had capped its rise back in 2007.

Also on tap are Japan's machinery orders and an interest rate decision by the Bank of Korea. Analysts polled by Reuters expect the BOK to cut interest rates to 2.5 percent, from 2.75 percent, in a bid to revive growth.

(Editing by Wayne Cole)

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