* Yen near high since late August amid doubt over BOJ policy
* BOJ Nakaso's speech seen broadly similar to Kuroda's
* Aussie edges up after Chinese trade data
(Updates prices, adds comments)
By Masayuki Kitano
SINGAPORE, Sept 8 The yen held firm against the
dollar on Thursday, clinging to its recent gains 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 broadly similar in tone to remarks by BOJ Governor
Haruhiko Kuroda earlier this week, in which Kuroda acknowledged
the costs of the BOJ's aggressive stimulus.
Nakaso said on Thursday the central bank will pursue its
massive stimulus programme by striking the right balance between
its powerful policy effects and potential adverse effects on
The dollar fell to as low as 101.41 yen after Nakaso's
comments but later pared its losses.
The dollar last stood at 101.65 yen, down 0.1 percent
on the day and not too far from Wednesday's low of 101.20 yen,
which was the dollar's lowest level since Aug. 26. For the week,
the dollar has fallen about 2.2 percent.
"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.
"As the market reaction suggests, I don't think it was
anything that leads to any big change to the outlook," he added.
The dollar has been under pressure since Friday's slightly
disappointing jobs report and a surprisingly soft service sector
survey on Tuesday cast doubt about the Federal Reserve's ability
to raise interest rates soon despite hawkish rhetoric from Fed
Moreover, investors have been bracing for a potentially
underwhelming policy announcement from the BOJ on Sept. 21, when
it is expected to unveil the results of a comprehensive policy
review it promised in July.
While many investors expect the BOJ to announce additional
easing steps, there is no clear consensus on what the central
bank will do given the widespread belief in markets that the
BOJ's stimulus is nearing its practical limit.
Even if the BOJ were to expand its stimulus, it is hard to
imagine it doing so in a way that will trigger a sustained drop
in the yen, said Masafumi Yamamoto, chief currency strategist
for Mizuho Securities in Tokyo.
"But at the same time, it is possible that they could come
out with something totally unexpected," he said, adding that
this uncertainty makes it difficult to place aggressive bets on
the yen rising against the dollar at this point.
The euro edged up 0.1 percent to $1.1251 but remained
below Wednesday's high of $1.12725.
Investors are focusing on whether the European Central Bank
would decide to extend its asset purchase programme and tweak
the parameters to ease supply scarcity issues, at its policy
meeting later in the day.
On top of this, the ECB's bond buying is also facing an
increasing hurdle because the pool of bonds, especially German
Bunds, it can buy is dwindling.
"I suspect they will try to dispel the notion that its
easing is near the limit. But I'm not sure it is ready to take
action today," said Ayako Sera, market economist at Sumitomo
Mitsui Trust Bank.
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 edged up 0.2 percent to
The Chinese trade data along with recent data showing a
pick-up in manufacturing activity points to some improvement in
China's economy, said Steven Dooley, currency strategist for
Western Union Business Solutions in Melbourne.
"That basically adds to the evidence...that we've seen a
pick-up in Chinese growth, which is good news for everyone. The
big question is whether it can continue," he said.
(Additional reporting by Hideyuki Sano in TOKYO; Editing by
Shri Navaratnam and Jacqueline Wong)