* Yen seesaws on moves in equities, commodities
* Cross/yen up from earlier lows
* Euro steadies after biggest one-day pct drop since June
* Talk of ECB rate cut, growth worries hamper euro
By Masayuki Kitano
SINGAPORE, April 18 The yen fell and pulled away
from intraday highs in choppy trade on Thursday as risk aversion
eased, while the euro steadied after sliding the previous day on
talk of more monetary easing by the European Central Bank.
The Australian dollar held steady at 101.19 yen.
Trading was choppy, with the Aussie dollar having trimmed its
losses after falling to as low as 100.24 yen earlier in the day.
The yen rose broadly earlier as commodities such as gold
fell and Asian equities retreated, but the Japanese
currency later trimmed its gains as equities and gold came off
their intraday lows.
Still, the yen will probably be supported on the crosses as
long as commodities stay wobbly, said Roy Teo, FX strategist for
ABN AMRO Bank in Singapore.
"What we do see right now is that (when there is) a bit of a
reduction in risk appetite...the yen still continues to
strengthen," Teo said.
"Until the market calms down I think the cross/yen upside is
limited," he added.
In the stock market, MSCI's broadest index of Asia-Pacific
shares outside Japan was down 0.4 percent at 463.33
. It had fallen to as low as 461.80 earlier.
The U.S. dollar rose 0.1 percent to about 98.21 yen,
having pulled up from an intraday low of 97.62 yen.
"There is a lot of two way flow in dollar/yen," said Adam
Gilmour, head of FX and derivatives sales for Asia Pacific for
Citi in Singapore.
"We basically saw a lot of traditional dollar sellers come
back into the market in the last couple of days, they had been
sitting on their hands on the move higher," he said.
"But real money and leveraged (players) are still looking
for a higher dollar/yen," Gilmour added.
The dollar had hit a four-year high of 99.95 yen last week,
with its rise stalling just short of the psychologically key 100
yen threshold due to options-related dollar offers.
Many market players, however, see the yen eventually
weakening beyond 100 to the dollar, due to the Bank of Japan's
drastic monetary stimulus.
The BOJ's radical monetary policy overhaul will pump about
$1.4 trillion into the economy in less than two years, via a
souped-up bond-buying scheme that is expected to drive Japanese
investors to look overseas in search of better yields.
Japanese capital flows data, however, contain little sign of
such outflows so far.
Latest data released on Thursday showed that Japanese
investors sold a net 331.9 billion yen in foreign bonds last
week, after having sold a net 1.1 trillion yen in overseas bonds
the week before that, when the BOJ announced its aggressive
The euro rose 0.1 percent to $1.3052.
The single currency regained a bit of ground after sliding
1.1 percent on Wednesday, its biggest one-day percentage drop
since last June.
"The market is generally in a risk off mode. For the euro,
$1.3000 is going to be the first line of defence on the
downside, that corresponds with the 40-day moving average as
well. Below that is $1.2929, the 200-day moving average," said
Sue Trinh, senior currency strategist at RBC in Hong Kong.
The euro took a hit on Wednesday after ECB Governing Council
member Jens Weidmann was quoted by the Wall Street Journal as
saying the bank could ease further if economic data warrants it.
"A rate cut in May still looks unlikely on the back of these
comments, albeit not impossible should data deteriorate
markedly," analysts at Commonwealth Bank wrote in a client note.
"However, should the economy underperform into the summer,
with hoped-for recovery looking more distant, further monetary
easing looks increasingly likely. Odds of a June or July rate
cut have increased, but ultimately further stimulus remains
data-dependent in coming months."