* Dollar/yen continues decline; BoJ in focus
* ECB easing expectations, election jitters hurt euro
* Aussie dollar hit by cenbank comments, iron ore slide
(Adds quote, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, May 20 The dollar fell against the yen
on Tuesday for a fifth straight session, undermined by a
persistent drop in U.S. Treasury yields, which analysts say
reflects uncertainty about global growth prospects.
The greenback could decline further against the yen if the
Bank of Japan does not expand its asset purchase program. On
Wednesday, the Japanese central bank is widely expected to keep
its policy unchanged at a two-day meeting, but the market will
be focused on BoJ Governor Haruhiko Kuroda's news conference.
"Kuroda may continue to highlight an improved outlook for
the Japanese economy, and it seems as though the BoJ will carry
its current (monetary) policy into the second half of the year,"
said David Song, current analyst at DailyFX, a unit of FX broker
FXCM in New York.
"That said, dollar/yen no longer looks like a one-way trade
as the BoJ softens its dovish tone for monetary policy, and a
greater deviation in the policy outlook may trigger a further
decline in the exchange rate," he said.
The Australian dollar, meanwhile, fell to a two-week low
against the greenback, hurt by a slide in prices of iron ore,
the country's biggest export earner.
But gains in the U.S. dollar against the Australian currency
failed to give the greenback a lift against the yen, which has
been on a five-day winning streak as U.S. Treasury yields have
softened in four of the last six sessions.
In late trading, the dollar fell 0.2 percent to 101.29 yen
. The pair also traded below its 200-day moving average -
a key technical gauge - for a second straight day.
"The strong correlation between dollar/yen and Treasury
yields continue to be the main driver," said Joe Manimbo, senior
market analyst at Western Union Business Solutions in
Washington. "Part of that is due to renewed concerns about the
health of the global economy."
Investors have voiced concern about the U.S. housing sector,
which could dampen growth in the world's largest economy. They
are also worried about China's economic outlook, a major driver
of the Aussie dollar.
Late on Tuesday, the Australian currency slid 0.8 percent to
US$0.9254, after earlier dropping to US$0.9251, its
lowest since May 5.
The Aussie has recovered solidly from lows reached in late
January, but worries over the pace of growth in China continue
to weigh broadly on its outlook and Reserve Bank deputy governor
Guy Debelle said potentially slower capital inflows to Australia
pointed to more weakness.
The euro, meanwhile, slipped 0.1 percent against the
dollar to $1.3698.
The euro zone currency could face more of a headwind ahead
of potentially destabilizing European Parliament elections this
week, where votes for anti-austerity, euroskeptic parties look
set to increase. Expectations of imminent easing from the
European Central Bank have also weighed on the euro's outlook.
(Editing by G Crosse)