* Dollar comes off four-year peak vs yen just below 100
* Euro rises as Italy 3-year debt costs fall at auction
* Yen slides against higher-yielding Australian, NZ dollars
By Wanfeng Zhou
NEW YORK, April 11 The dollar on Thursday moved
off a four-year high against the yen, but still looked bound to
climb above the key 100 yen level as traders bet the Bank of
Japan's aggressive monetary easing will trigger further yen
The euro, meanwhile, climbed to a six-week peak against the
dollar as Italian three-year debt costs eased to their lowest
since January at an auction.
The euro also hit a more than three-year high against the
yen on Thursday.
The dollar has soared 7 percent since the BoJ pledged last
week to inject about $1.4 trillion into the Japanese economy to
end decades-long deflation and achieve its 2 percent inflation
target. But the pace of the rally has slowed ahead of option
barriers at 100 yen, a psychologically-significant level for the
"I think there's trepidation going above 100 because we've
gone so quickly ... in the wake of the BoJ decision," said
Michael Woolfolk, senior currency strategist at BNY Mellon in
BoJ Governor Haruhiko Kuroda's comments on Wednesday that
there would be no additional stimulus in coming months and that
policymakers are closely monitoring financial markets also
limited near-term losses in the yen, some analysts said.
While the Japanese central bank's action will lead to a
weaker currency, Woolfolk said a rapid fall in the yen could
hurt the credibility of the BoJ in the medium term.
"The attempt here is not to prompt speculators to debase the
currency. That's not the purpose. The purpose is to end
deflation and to provide a springboard for renewed growth and
employment in Japan," he said.
The dollar was last trading down 0.3 percent at 99.41
yen, after having risen as high as 99.87 yen on Wednesday to its
highest level since April 2009.
Technical resistance is seen at 99.73 yen - the 50 percent
retracement of the dollar's drop from its June 2007 high of
124.14 yen to a record low of 75.311 yen set in October 2011.
Traders cited hefty offers to sell dollars at 100 yen from
Japanese exporters. They added, however, that most investors
were looking to use dips to add to long-dollar positions.
A rise above 100 yen would open the door for a test of the
April 2009 peak of 101.45 yen, analysts said.
Ulrich Leuchtmann, head of currency research at Commerzbank
in London, said it was possible that the dollar could rise to
115 yen or higher by year-end, but added it was difficult to
predict the extent of the move.
"The 100 yen level is a psychological level that might take
a bit of time to break, but this is still a very significant
qualitative change by the Bank of Japan that is not fully priced
in yet," said Leuchtmann.
Japan's aggressive monetary easing contrasts with
expectations the Federal Reserve may slow its bond buying later
this year. These expectations were given a boost as minutes from
a recent Fed meeting released on Wednesday showed a few U.S.
policymakers looking to taper asset purchases by mid-year.
The euro rose to its highest against the yen in
more than three years, hitting 130.82 yen on Reuters data, and
was last trading up 0.1 percent on the day at 130.50.
Against the dollar, the euro rose 0.4 percent to
$1.3122, after a session peak of $1.3138, the highest since the
end of February.
Speculation was growing that the BoJ's ultra-loose policy
would drive Japanese investors to riskier and higher-yielding
foreign assets, with the euro one of the beneficiaries.
So far, however, there was little evidence of that
happening. Data from Japan's Ministry of Finance showed Japanese
investors sold a net 1.145 trillion yen ($11.5 billion) worth of
foreign bonds last week, the highest sales in a year.
The yen was particularly softer against higher-yielding
currencies, such as Australian and New Zealand dollars, as
investors borrow in yen cheaply and use the proceeds to invest
in such higher-yielding currencies in what are known as carry
The Australian dollar rose to a five-and-a-half year high of
105.39 yen while the New Zealand dollar hit 86.43 yen
, its strongest since early 2008.