* G20 meeting seen unlikely to criticise BOJ policy
* Euro retreats from 7-week high versus dollar
* Swedish crown falls as Riksbank lowers rate forecasts
By Wanfeng Zhou
NEW YORK, April 17 The yen fell for a second
straight day against the dollar and euro on Wednesday on
expectations major developed and emerging economies will not
voice strong concern over Japan's aggressive monetary easing
that has triggered a sharp slide in its currency.
The euro slid from a seven-week high against the dollar,
tracking losses in European shares. Traders also cited a media
report in which a former European Central Bank board member
expressed concerns about the euro's gains.
Policymakers from the Group of 20 countries begin meetings
in Washington on Thursday. Speculation members may discuss the
yen's weakness had grown earlier this week after Washington said
it would watch Japan's policies.
But those concerns eased after comments from other officials
suggested the group as a whole will not criticise the policy on
the grounds that it is motivated by domestic economic concerns.
"Dollar/yen has moved a bit higher, trying to hold the 98
level, as traders now expect that the G20 meeting later this
week will not be as 'difficult' for the Japanese delegation as
first suspected," said Matthew Lifson, senior trader and analyst
at Cambridge Mercantile Group in Princeton, New Jersey.
"Most predictions for the dollar/yen still expect a test of
the 105.00 level by mid-summer as 'Abenomics' continues in
Japan," he said.
The dollar rose 0.5 percent to 98.01 yen, although it
remained below the four-year high of 99.94 yen set on Reuters
data last week. The dollar has gained 5 percent since Japan's
aggressive easing action early this month and has climbed 13
percent so far this year.
Many analysts believe that the abundance of global liquidity
due to monetary easing in Japan and the United States will also
lead to further weakness in the yen as Japanese domestic
investors look to use it to buy overseas assets with better
Investors will closely watch the weekly flows data from
Japan's Ministry of Finance due out on Thursday, currency
strategists at Brown Brothers Harriman wrote to clients.
"There is keen interest in how Japanese investors are going
to respond to the new, more aggressive, Bank of Japan monetary
policy," they said. "Markets were disappointed that last week's
Ministry of Finance data showed that Japanese investors were not
only net sellers of foreign bonds, but they sold the most in a
The euro rose 0.2 percent to 128.80 yen. Against
the dollar, the euro slipped 0.3 percent to $1.3140. It
had hit a session peak of $1.3201, matching a seven-week high
set in the previous session.
A media report cited former member of the ECB Executive
Board Lorenzo Bini Smaghi as saying the central bank should find
ways to stop the euro from gaining. Some analysts said this
could reflect euro zone policymakers' growing concern about the
region's weak economic growth.
Traders also reported selling of the euro against the yen by
hedge funds. The single currency is now some way off a
three-year peak of 131.11 yen hit last week.
Sterling hit a one-month low against the euro on Wednesday
after data showing weak earnings growth and a rise in Britain's
unemployment rate added to concerns about the fragile economic
The euro rose 0.5 percent to 86.21 pence.
Against the dollar, the pound fell 0.8 percent to $1.5241
The Swedish crown fell after the Riksbank, the country's
central bank, held interest rates as expected but delayed plans
for tighter policy well into next year.
The euro rose to a one-and-a-half month high
around 8.4760 crowns and last traded at 8.4674, up 1 percent.
Against a basket of major currencies, the U.S. dollar rose
0.5 percent to 82.151. Analysts said losses in stocks and
commodities boosted demand for the safe-haven U.S. currency.