* Dollar/yen and euro/yen push higher after Aso's comments
* Aussie firmer but on track for hefty weekly loss
* Global growth worries, slump in commodity prices weigh
By Masayuki Kitano
SINGAPORE, April 19 The yen fell broadly on
Friday after Japanese Finance Minister Taro Aso said Japan faced
no G20 opposition to its stance that the Bank of Japan's
aggressive monetary stimulus is aimed at beating deflation.
The comments by Aso eased concerns that the bold monetary
easing, which had triggered a drop in the yen to a four-year low
versus the dollar last week, could come under criticism at the
The dollar rose 0.4 percent on the day to 98.53 yen,
while the euro gained 0.5 percent to 128.75 yen.
"The market had been rather nervous about the G20," said a
trader for a European bank in Tokyo, adding that such jitters
had increased after the United States issued its semi-annual
report on the currency practices of major trade partners last
In the report, the United States had put Japan on notice
that it was watching its economic policies to ensure they were
not aimed at devaluing the yen to gain a competitive advantage.
Still, a rapid move higher in the dollar versus the yen
seems unlikely at this point, said the European bank trader,
adding that strong gains in the greenback might only occur next
week, after the G20 meeting is actually over.
Global policymakers are gathered in Washington for a Group
of 20 nations meeting on Thursday and Friday. They are expected
to confirm a February pledge to avoid competitive currency
devaluations, officials have said.
The BOJ's sweeping monetary stimulus unveiled earlier in
April had triggered a tide of yen-selling that lifted the dollar
to a four-year high of 99.95 yen last week.
The yen, however, has regained a bit of ground this week as
renewed concerns about global growth prompted investors to trim
bearish positions in the Japanese currency.
Among the biggest losers this week are commodity currencies
such as the Australian dollar, which had been stung by worries
about growth in China, Australia's single biggest export market.
The Aussie edged up 0.1 percent to $1.0314. The
Australian dollar, however, is down 1.8 percent so far this
week, on track for its biggest weekly fall since October.
The outcome of the G20 is likely to be "relatively benign"
and the yen seems set to weaken further in the next few months,
said Callum Henderson, Singapore-based global head of FX
research for Standard Chartered Bank.
"Our view remains that the yen will continue to fall. Our
(dollar/yen) forecast for end-Q2 is 105," Henderson said.
Japanese capital flows data shows that Japanese investors,
rather than make a dash toward overseas assets this month, have
instead been repatriating funds from abroad.
Still, analysts expect Japanese investors' appetite for
overseas assets to pick up eventually.
"I do think that given the BOJ's aim of flattening the JGB
curve...that Japanese longer term investors such as life
insurers and pension funds will be forced to go abroad," said
Henderson at Standard Chartered Bank, referring to the yield
curve for Japanese government bonds.
"When or if it does happen, clearly it's going to be yen
negative," Henderson said.
To be sure, there are some foreign bond markets within the
G10 and emerging markets where Japanese investors will probably
get better yields than are available at home even if they fully
hedge their currency risk, Henderson added.