* Dollar/yen advances toward psychological 100 mark
* G20 does not criticize Japan's radical easing policy
* Euro eases toward bottom of recent range vs dollar
By Luciana Lopez and Toni Vorobyova
NEW YORK/LONDON, April 22 The dollar slipped
against the yen on Monday but remained within a hair's breadth
of the key 100 level after major industrialized nations gave a
stamp of approval to a massive Japanese easing program, which
has eroded the currency.
Japan officials said that the Group of 20 leading economies
accepted that the country's $1.4 trillion stimulus program is
aimed at conquering 15 years of deflation rather than at
weakening the yen.
In response, the dollar climbed as high as 99.90 yen, within
striking distance of a four-year high of 99.95 set on April 11
and the 100 level, where option barriers are said to be lined
up. At 1113 EDT (1513 GMT), it was at 99.240 yen, down 0.26
"The lack of pushback by the G20 effectively gives the BOJ
room to ease further if needed and should keep the yen biased
broadly lower," said Omer Esiner, chief market analyst with
Commonwealth Foreign Exchange, Inc, in Washington, DC.
A break of 100 could trigger stop-loss buying, which could
take the pair up to 101.45 yen, an April 2009 high that could
act as near-term resistance. Reported large option expiries at
100 will keep the currency pinned to that level.
But with the yen not hitting similar highs against other
currencies, such as the Canadian and Australian
dollars, the Japanese currency's weakness against the
dollar could be limited.
"I think if you saw the yen in as weak a state against the
crosses it might add a little confirmation, it would make people
a little more comfortable in selling the yen now against the
dollar and against a lot of currencies," said Robert Lynch, head
of currency strategy for the Americas at HSBC in New York.
A sharper slide in the yen would also require more
information on flows out of Japan, said Adam Cole, global head
of FX strategy at RBC Capital Markets, who sees the yen staying
at around the 100 mark a month from now.
"To make it (a break of 100) sustainable, you need to see
strong evidence that Japanese investors are buying rather than
selling overseas assets, or you need to see a shift in hedging
behavior ... But at the moment we don't see that from capital
One-month implied volatility on dollar/yen jumped as high as
14.415, a level not seen in two years, underscoring
increased demand for options to protect against yen weakness.
Data on Friday showed currency speculators raised their bets
against the yen in the week ended April 16, while lifting
positions in favor of the U.S. dollar.
The yen has weakened 23 percent against the dollar since
mid-November, when Shinzo Abe, who became Prime Minister in
December, promised bold monetary and fiscal expansionary
policies during his election campaign.
The euro also remained vulnerable against the dollar on
central bank expectations. On Monday the single currency
fell 0.16 percent to $1.3030.
Technical analysts at SEB said that a break below $1.3026
would likely "trigger a new round of selling" in the euro, with
the next support then seen at $1.3001.
From a fundamental point of view, the euro has been
hamstrung by persistent talk of an interest rate cut by the
European Central Bank.
The euro "is moving towards 1.30 this morning because more
European Central Bank officials sound like they support the idea
of a rate cut or some form of additional easing from the central
bank," said Kathy Lien, managing director at BK Asset
Management in New York.
That makes this week's euro zone PMI and German IFO reports
key, Lien added.
Even the re-election of Italy's president offered little
support to the single currency, analysts said.
"Quite frankly, I don't think removing this uncertainty from
the equation will necessarily translate into a euro positive ...
as it means that there's yet to be resolution to the hung
parliament," said Christopher Vecchio, currency analyst at