* Dollar could break 100-yen level this week -strategist
* Aussie boosted by Chinese imports surge
* European bond yields hit lows, talk of yield-hungry
By Sophie Knight and Lisa Twaronite
TOKYO, April 10 The yen bobbed around a nearly
four-year low against the dollar on Wednesday, with strategists
expecting the Japanese currency to break below the 100-yen level
on the burst of momentum created by the Bank of Japan's most
ambitious monetary expansion campaign announced last week.
The Australian dollar rose 0.3 percent to a 2-1/2 month high
of $1.0518 after Chinese imports surged 14.1 percent on
the year, well beyond market expectations, overtaking exports to
create a mild trade deficit.
The dollar was steady against the yen at 99.00 on
trading platform EBS, after rising as high as 99.67 yen on
Tuesday, its strongest level since May 2009.
Technical resistance lies at 99.73 yen, which is the 50
percent retracement of the dollar's drop from its June 2007 high
of 124.14 yen to its record low of 75.311 yen set in October
2011. Options barriers also lie around the 100-yen level,
traders have said.
"Dollar/yen failed to make a run for 100 over the past 24
hours but this does not mean the currency pair will not try
again before the end of the week," said Kathy Lien, director at
BK Asset Management in New York.
"We believe that it will only be a matter of time before
this level is taken out," she said in a note to clients.
The dollar has jumped around 7 percent against the yen since
the BOJ said last Thursday that it will pump about $1.4 trillion
yen into the economy and double Japan's monetary base in two
years to defeat deflation.
The move was even bigger than yen bears had hoped for, and
prompted many strategists to rejig their forecasts in favour of
"The BOJ has shown a strong commitment, which lit a fire
under the dollar-yen's feet," said Kyosuke Suzuki, director of
forex at Societe Generale.
The euro was relatively steady against the yen, inching down
0.1 percent to 129.53 after rallying around 4 percent
since the BOJ announcement to 130.09 yen on EBS on Tuesday, its
loftiest level since January 2010.
The common currency was also steady at $1.3087 after
hitting $1.3100 on Tuesday, its highest since March 15.
There have been murmurs that plummeting Japanese bond yields
have already sent domestic investors in search of higher yields
overseas, helping push French, Dutch, Austrian and Belgian bond
yields to record lows.
However, it is still unclear whether such flows are driven
by Japanese investors or speculators buying in anticipation of
"There is a lot of talk about Japanese investors moving
abroad, but it's hard to see them heading for junk bonds from
the likes of Spain or Portugal. They're unlikely to buy Bunds
either as they don't offer any yield," said Suzuki of Societe
RBA OFFICIAL SAYS DOOR OPEN FOR FURTHER RATE CUTS
The Aussie gave back some of its recent sharp gains against
the yen, buying 104.03 yen after rising as high as
104.35 yen on Tuesday, its highest since mid-2008.
A top official at Australian's central bank said on
Wednesday that industry was responding well to pressure from the
currency's recent strength, and that the bank was a long way
from intervening to weaken the Aussie.
However, Reserve Bank of Australia Assistant Governor
Christopher Kent said the central bank still has room to cut
interest rates if necessary.
Later on Wednesday, investors will be watching the release of
the minutes of the U.S. Federal Reserve's last monetary policy
meeting, for any signal on whether the central bank could slow
or halt its asset buying stimulus, which is seen as negative for
the dollar as it is tantamount to printing money.