* Yen retreats vs dollar, euro, Aussie, sterling
* BOJ plans to make negative rates core of future
* Aussie, loonie post modest rebound after being hit by oil
By Shinichi Saoshiro
TOKYO, Sept 14 The yen slipped broadly on
Wednesday after a report that the Bank of Japan is considering
further monetary easing steps, including taking interest rates
deeper into negative territory.
The Nikkei business daily reported that the BOJ plans to
make its controversial negative interest rate policy the
centrepiece of future monetary easing, promising to weigh
further cuts as expansions to asset buying near their limits.
"The view was already there that the BOJ could steepen
Japan's excessively flat yield curve and deepen minus rates to
lessen the negative impact on financial institutions," said
Masafumi Yamamoto, chief forex strategist at Mizuho Securities
"But it appears that the such a view had not been fully
priced in by the market."
The euro added 0.5 percent to 115.670 yen and the
Australian dollar climbed 0.7 percent to 77.06 yen.
Sterling rose 0.8 percent to 135.85 yen.
The dollar extended overnight gains and was up 0.5 percent
at 103.110 yen. The greenback briefly touched 103.200,
its highest in eight days.
The greenback treaded carefully against the yen, however,
with a week still to go until the Federal Reserve's and BOJ's
Sept. 20-21 meetings meaning there was plenty of time for
speculation over policy to churn the market.
"The media report is about the BOJ considering a deeper cut
in negative rates, but in a seemingly more broader time frame.
As such, expectations that the BOJ would ease next week have not
risen excessively," said Kyosuke Suzuki, director of forex at
Societe Generale in Tokyo.
"The moves we are seeing today are irregular, with
dollar/yen gaining despite weaker stocks. It is safe to say
short-term flows are driving movements for now."
The Dow sank 1.4 percent on Tuesday amid a slide in
crude oil prices and the Nikkei was last down 0.25
The euro was flat at $1.1219 after shedding 0.1
percent the previous day.
The dollar index was steady at 95.603 following an
overnight gain of 0.25 percent, with a rise in U.S. long-term
bond yields to a three-month high buoying the greenback.
U.S. long-term yields have risen in the past month along
with a steepening in the Japanese government bond yield curve
caused by speculation over BOJ policy manoeuvres.
Commodity-linked currencies such as the Australian and
Canadian dollars posted a modest rebound after sliding overnight
struggled against the U.S. currency on the back of a tumble in
The Aussie was up 0.2 percent at $0.7484 after
retreating more than one percent overnight to a seven-week low
The Canadian dollar was a touch firmer at C$1.3077
to the dollar, putting a bit of distance between a one-month low
of C$1.3190 seen on Tuesday.
Oil prices fell as much as 3 percent on Tuesday after the
global energy watchdog and OPEC revised forecasts, indicating
the global crude glut could persist for much longer than
(Reporting by Shinich Saoshiro; Editing by Eric Meijer and Kim