FOREX-Yen intervention risk builds before US jobs data

Fri Feb 3, 2012 6:26am EST

Related Topics

* Dollar/yen near 3-month lows of 76.027 yen
    * US jobs data may trigger a move towards record low of
75.31
    * Japanese prepared to intervene to weaken yen
    * Euro steady as market waits for Greek debt swap deal

    By Neal Armstrong	
    LONDON, Feb 3 (Reuters) - The dollar hovered near
three-month lows versus the yen on Friday, with the risk of a
move towards record lows mounting before U.S. jobs data, keeping
alive the threat of official intervention to weaken the Japanese
currency.  	
    Japanese Finance Minister Jun Azumi said on Friday that
speculative yen buying had gathered pace since last week and
repeated that he was ready to act decisively to counter
"one-sided" moves. 	
    The dollar bought 76.23 yen, not far off this week's
three-month low of 76.027. It was moving in a tight range, but
remains within easy reach of a record low of 75.31 touched on
Oct. 31, when Japan launched a massive round of intervention to
weaken the yen.	
    U.S. employment data at 1330 GMT is expected to show the
world's biggest economy created 150,000 jobs in January, keeping
the unemployment rate steady at 8.5 percent..	
    Dealers said a strong jobs report would take the pressure
off the perceived safe-haven yen, but they added that the dollar
was still likely to remain pressured given the Federal Reserve's
recent pledge to keep interest rates low until the end of 2014. 	
    "Dollar/yen has gone down despite risk going up of late as
the pressure has really been on the dollar after the FOMC
meeting," said John Hardy, currency strategist at Saxo Bank.	
    "I think the will of the Japanese will be tested in coming
days, but we're up against a hard wall with all the
determination and the artillery the Japanese have," he added.	
    Testifying before Congress, Fed Chairman Ben Bernanke on
Thursday said Europe's financial crisis still threatened the
U.S. recovery, and said the central bank would do everything it
could to ward off damage. 	
    Traders said stop-losses were building below 76.00, which
may be triggered in the wake of the U.S. jobs data. 	
    "The market has stops all the way down to 74.50 and we would
use a potential stop-loss run to build up a fresh long position
in the pair," said a spot trader at a European bank.	
    The dollar was down around 0.2 percent versus a currency
basket at 78.834 after hitting near 2-month lows on Wednesday.
The 100-day moving average was acting as support at 78.701.    	
   	
    WAITING FOR A DEAL        	
    The euro was up around 0.2 percent at $1.3170 with
investors awaiting the outcome of talks between Greece and its
private creditors on the so-called private sector involvement
deal (PSI).  	
    Greek officials have said repeatedly that a deal is around
the corner, and European Union Economic and Monetary Affairs
Commissioner Olli Rehn reiterated on Thursday that it could be
agreed by the end of the week. 	
    "In the very short-term people will be reluctant to take
positions in the euro as there is a lot of announcement risk
surrounding Greece," said Daragh Maher, currency strategist at
HSBC.      	
    The euro hit a six-week high of $1.3235 last week, stalling
ahead of resistance at $1.3244, the 38.2 percent retracement of
the euro's fall from October to January.	
    Against the Swiss franc, the euro was flat at 1.2050 francs 
 close to the 1.2000 level the Swiss National Bank has
 said it would defend at all costs. 	
    SNB interim head Thomas Jordan was reported on Thursday as
saying the central bank would enforce the minimum Swiss franc
exchange rate against the euro "with the utmost determination".
 	
    China's non-manufacturing purchasing managers index fell to
52.9 in January from 56 the month before, prompting traders to
lighten positions in riskier currencies. The Australian dollar
 was steady at $1.0710, off a five-month high of $1.0758
hit on Thursday.
FILED UNDER: