* Yen near 1-month high vs dollar
* Risk that BOJ disappoints expectations for
* ECB & BOE policy meetings also eyed
By Ian Chua and Hideyuki Sano
SYDNEY/TOKYO, April 4 The yen held near
one-month highs against the dollar on Thursday, with investors
adopting a cautious stance as they waited to see just how
aggressive the Bank of Japan will be in tackling deflation.
Having talked up expectations for bold measures, including
an immediate start to its open-ended bond buying programme, the
BOJ will be hard pressed to surprise markets.
Given the BOJ's track record for under delivering, the
market has already trimmed back short yen positions just in
case. That is one reason the yen has rallied a little in the
past three weeks, coming off multi-year troughs against the
dollar and euro.
The greenback fell 0.2 percent so far on Thursday to trade
at 92.93 yen, near one-month low of 92.57 hit on Tuesday.
It has lost nearly 4 percent from a 3-1/2 year peak of 96.71
set a few weeks ago.
The dollar/yen looks increasingly vulnerable at least on
charts, having pierced below its 55-day moving average for the
first time since the yen had started declining in November.
On daily Ichimoku charts, the dollar held above an important
support of cloud top, which stood at 92.20 on Thursday and will
rise to 92.67 on Friday, though a break there could send a
strong bearish signal.
Another support is seen around 92.55, the 23.6 percent
retracement of its Nov-March rally.
Should the BOJ disappoint at this meeting, however, Nomura
analysts caution that Governor Haruhiko Kuroda is very likely to
try to keep expectations high for the next meeting in three
The outcome of the meeting will be announced between
0330-0530 GMT, followed by Kuroda's media briefing at around
"Thus, the press conference is likely to be a good timing of
dip buying, if the market is disappointed by the announcement,"
Nomura analysts wrote in a client note.
The dollar came under pressure overnight also after
disappointing private sector jobs data, which prompted traders
to ratchet down their expectations on Friday's payrolls data.
In addition, U.S. service sector growth falls to the slowest
in seven months, denting recent optimism on the U.S. economy.
Also in focus later in the day are policy meetings of the
European Central Bank and Bank of England.
Both central banks are not expected to deliver any new
stimulus for now, although the ECB is likely to try and calm
markets by pledging to keep the banking system lubricated after
Cyprus's brush with financial meltdown.
Still the risk of any surprises, such as an interest rate
cut from the ECB or a restart of the BOE's bond-buying
programme, is keeping investors wary of the euro and sterling.
The euro was at $1.2845, flat on the day but not far
from a four-month trough of $1.2750 plumbed on March 27.
Sterling was little changed at $1.5130, having dipped
to a two-week low of $1.5075 on Wednesday.
The Australian dollar gained 0.2 percent to $1.0472
on surprise strength Australian retail sales. It stood near its
10-week high of $1.0498 hit on Wednesday but option-related
offers at $1.05 were blocking the currency's further advance.