* Yen off lows after USD/JPY fails to clear 100
* Downtrend still intact for Japanese currency
* Aussie knocked lower, eyes on China PMI report
By Ian Chua
SYDNEY, April 23 The U.S. dollar was nursing a
grudge in early Asian trade on Tuesday after another attempt at
100 yen failed due to options-related offers, but traders
suspect it is only a matter of time before the psychological
level is broken.
The greenback bought 99.35 yen, little changed from
late New York levels but down from Monday's high near 99.90.
Traders said there is demand to buy dollar/yen on dips and a
clear break above 100 will pave the way for a retest of the
April 2009 high around 101.45.
The yen's downtrend remains firmly intact with Japan's
radical monetary stimulus programme giving investors no
incentive to hold the Japanese currency. The market will also be
wary of buying the yen in the lead up to the Bank of Japan (BOJ)
policy meeting on Friday.
"USD/JPY made another failed run at the 100.00 figure, but
the BOJ interest rate decision on tap for later this week may
spur a sharp selloff in the yen as the central bank takes a more
aggressive approach in achieving the 2 percent target for
inflation," said David Song, analyst at DailyFX.
"After expanding its bond purchasing program to 7 trillion
yen earlier this month, the BOJ may stick to the sidelines this
time around, but Governor Haruhiko Kuroda may broaden the scope
of the non-standard measure to include a greater range of asset
classes in an effort to encourage a stronger recovery."
The euro also retreated against the yen, slipping to 129.77
from Monday's high around 130.74. But it remained
near a 3-year peak of 131.10 reached earlier this month.
Against the dollar, the common currency was at $1.3065
, still stuck in a $1.3000/3200 range for now. Keeping a
lid on the euro were comments from European Central Bank
policymakers that suggested the bank may be leaning towards a
cut in interest rates.
Commodity currencies suffered a fresh setback overnight with
the Australian dollar hitting a six-week low of $1.0236
, pulling further away from a high near $1.0600 set
earlier in the month.
It was last at $1.0266, with immediate support at $1.0226,
the 76.4 percent retracement level of its March to April rally.
The Aussie's fall came after data showed the pace of
recovery in the U.S. housing market had slowed, adding to
worries about the health of the global economy.
The market's next focus is HSBC's advance report on China's
manufacturing activity for April due at 0145 GMT. Investors are
keen to see how the second quarter is shaping up after first
quarter economic growth numbers disappointed markets.