* BOJ plans negative rates at core of future easing-Nikkei
* Yen hits one-week lows
* Aussie, loonie post modest rebound after oil slide
By Jemima Kelly
LONDON, Sept 14 The yen slipped to a one-week
low against the dollar on Wednesday, after a report said the
Bank of Japan is considering further monetary easing steps,
including taking interest rates deeper into negative territory.
While sources have told Reuters the BOJ may make its massive
government bond purchasing programme more flexible, the Nikkei
business daily said that in doing so the central bank will
likely maintain its pledge to increase its holdings, to be
announced at next week's policy meeting.
The yen climbed 25 percent against the dollar in the
year up to June, when the safe-haven currency hit a 2-1/2-year
high of 99 yen per dollar in the aftermath of Britain's shock
vote to leave the European Union.
That was despite the BOJ's move in January to cut interest
rates into negative territory for the first time - a step aimed
at weakening the yen.
"The Bank of Japan spent a long time being a bit introverted
and unsure of itself after January's policy move failed," said
Kit Juckes, macro strategist at Societe Generale in London.
"If they come out more committed now, particularly into a
rising U.S. yield environment, I think they can make a weaker
yen stick," he added. U.S. long-term yields have risen in the
past month, hitting a three-month high on Tuesday.
The dollar gained 0.7 percent on Wednesday to hit 103.35
yen, its strongest against the Japanese currency since September
6. The euro gained 0.9 percent to hit a nine-day high of 116.085
"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 such a view had not been fully priced
in by the market."
The greenback was flat against a basket of currencies
, having hit a one-week high the previous day, just a week
before the U.S. Federal Reserve's next policy meeting begins.
Markets are pricing in just a 15 percent chance that interest
rates will be hiked this month, according to CME FedWatch.
Commodity-linked currencies such as the Australian and
Canadian dollars posted a modest rebound after
sliding overnight on the back of a tumble in oil prices.
For Reuters new Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Shinichi Saoshiro in Tokyo)