FOREX-Euro falls sharply, yen boosted as BOJ disappoints
* Yen rebounds as BOJ decision falls short of expectations * BOJ open-ended asset purchases to come into effect in 2014 * BOJ doubles inflation target to 2 pct * Euro falls vs dollar, German ZEW at 1000 GMT in focus By Anooja Debnath LONDON, Jan 22 (Reuters) - The euro fell sharply against the yen on Tuesday on speculation that some large German banks could be asked to split their investment banking operations, causing European shares to lose ground. The yen was strong across the board after the Bank of Japan said its open-ended commitment to buy assets would only kick in next year, disappointing those who expected more aggressive measures. "The reasons for the move in the euro are due to the DAX declining with German banks selling off," said Michael Sneyd, FX strategist at BNP Paribas. "Moves like this reflect that positioning in the euro is very vulnerable." The single currency fell 1.4 percent to 117.32 yen from a high of 120.18 yen touched after the BOJ's decision. The BOJ, which has been under intense political pressure to overcome deflation, doubled its inflation target to 2 percent as had been widely expected. It also said it had decided to switch to an open-ended approach of buying a certain amount of assets each month next year without setting a deadline for completing the purchases. "There was some disappointment in markets that the BOJ would start their open-ended bond purchases only in January 2014, so we see some profit taking in dollar/yen," said Bernd Berg, global FX strategist at Credit Suisse. The dollar also fell 1.0 percent against the yen to a session low of 88.365 yen as investors rushed to lock in profits after the BOJ decision. Traders said it fell past stops at 88.50 yen, with bids seen at 88.00-88.20 yen. Chartists said support for dollar/yen was at 87.80 yen, its Jan. 16 low. The dollar slipped from 90.18 yen shortly after the meeting and was some way off 90.25 yen, the 2-1/2 year high hit on Monday. Stop-loss selling added to the dollar's drop, said Jeffrey Halley, FX trader for Saxo Capital Markets in Singapore."The BOJ increase in asset purchases is only commencing in 2014. So no strong immediate increase in easing," Halley said. "This was combined with the whole street having dollar/yen stops under 89.50 yen," he added. EURO FALLS Against the dollar, the euro was down 0.1 percent to $1.3298 . While the euro has struggled to break above the $1.34 level since it hit a 10-month high of $1.3404 a week ago, strategists said single was likely to remain firm as the concerns around the euro zone crisis ease. After European Central Bank President Mario Draghi's surprisingly upbeat press conference helped buoy the euro, the Bundesbank lent further support to it on Monday after saying Germany's economic slump had likely already bottomed out. Markets will be looking at the German ZEW economic sentiment figures due 1000 GMT to reaffirm that Europe's largest economy was recovering. "If we get an upwards surprise in the economic data out of Germany then the euro could test the $1.34 level," Credit Suisse's Berg said.