* Yen drifts off one-month high vs USD
* Euro & sterling pressured after more weak data
* Markets wary ahead of central bank meetings
By Masayuki Kitano and Ian Chua
SINGAPORE/SYDNEY, April 3 The yen inched lower
versus the dollar on Wednesday while the euro edged lower in a
market largely lacking conviction ahead of policy decisions by
the Bank of Japan and European Central Bank on Thursday.
Yen bears are worried the BOJ, in its first policy review
under new governor Haruhiko Kuroda, might not live up to
expectations as markets are already positioned for aggressive
The dollar firmed 0.1 percent to 93.50 yen, inching
away from a one-month low of 92.57 yen set on Tuesday. The
dollar was still some way off a 3-1/2 year high of 96.71 yen set
"The bar is high for the BOJ to meet or exceed market
expectations," said Roy Teo, FX strategist for ABN AMRO Bank in
Still, Kuroda will probably provide some forward guidance on
the prospects for further stimulus measures, and that may help
support the dollar against the yen, Teo said.
"I do see the 90 to 91 level as quite good support for
dollar/yen," he added.
Another possible short-term support for the dollar lies at
about 92.11 yen, which is the top of the cloud on the daily
Ichimoku chart, a popular technical analysis tool.
The BOJ is widely expected to ramp up its bond buying and
extend the maturities of the bonds it purchases at the April 3-4
Kuroda said on Tuesday that he wants to combine two
different schemes that the central bank uses to purchase
government debt, reinforcing expectations of bold monetary
Combining the schemes would allow the BOJ to buy
longer-dated bonds more easily and clarify how much it is
expanding its balance sheet.
"Much of the BOJ dovishness is already priced in and traders
remain wary of jumping into short yen positions at current
levels," said Vassili Serebriakov, strategist at BNP Paribas.
The euro slipped 0.1 percent versus the dollar to $1.2804
, staying within sight of a four-month low of $1.2750 set
The single currency has sagged back down after hitting a
one-week high of $1.2878 on Tuesday, weighed down by euro zone
data showing the region was well into economic contraction
territory last month.
Markit's Eurozone Manufacturing PMI, released on Tuesday,
showed that manufacturing across the euro zone fell deeper into
decline in March.
This has prompted expectations European Central Bank
President Mario Draghi would strike a more dovish tone at
Thursday's monetary policy meeting. The ECB is widely expected
to keep interest rates unchanged at a record low of 0.75 percent
at this week's meeting.
The Bank of England is also likely to hold steady at its
policy decision on Thursday but more action in the form of
renewed government bond-buying is expected soon.
The market has been giving sterling a wide berth and piled
pressure on the currency on Tuesday after data showed British
manufacturing activity shrank for a second consecutive month in
The pound slipped 0.1 percent to $1.5086. Against
the New Zealand dollar, sterling last stood at NZ$1.7942
, having hit an all-time low near NZ$1.7915 on