* Dollar supported after jobless claims fell by 16,000
* Dollar/yen resistance at 100 yen still formidable
* Euro still under pressure from ECB rate cut expectations
* Pound near two-month high after UK GDP
By Hideyuki Sano
TOKYO, April 26 The dollar traded near a
four-year high against the yen and kept an upper hand against
the euro on Friday after an unexpectedly big slide in U.S.
jobless claims alleviated some concerns about a slowdown in the
world's biggest economy.
Major currencies were trading in tight ranges ahead of a
Bank of Japan policy meeting and economic outlook report as well
as U.S. growth figures later in the day.
The dollar fetched 99.35 yen, up slightly from late
U.S. levels and not far off a four-year high of 99.95 yen hit a
half a month ago.
The U.S. currency has rebounded from a Thursday low just
below 99 yen after data showed the number of new applicants for
jobless claims fell by 16,000.
The dollar has risen more than 14 percent against the yen so
far this year as Japan pursued aggressive monetary easing to
lift the economy.
Still, 100 yen has proved to be a formidable resistance
level for the U.S. currency in the past couple of weeks, with
selling emerging from players hedging their barrier option
positions as well as from Japanese exporters when the level is
But some market players think 100 yen will be broken soon,
as some of these barrier options are said to be expiring this
week, and as selling from Japanese exporters' selling could
subside during a string of Japanese holidays next week.
"Some people may try to lift the dollar next week, when the
market will be thin," said Bart Wakabayashi, head of forex at
But others think the dollar's rally may soon run out of
steam, noting that it has failed to break 100 so far despite a
lot of bullish predictions.
While the market is focused on a Bank of Japan policy
meeting on Friday, most market players doubt it will provide
fresh catalysts for the yen to weaken further.
The central bank is expected to keep policy on hold after it
unveiled a massive two-year bond buying scheme at its previous
meeting on April 4 and to project inflation to rise to around
two percent in two years in an economic outlook report.
"The BOJ's easing will continue for two years but that
doesn't necessary mean the yen will always weaken in the next
two years," said Daisuke Uno, chief strategist at Sumitomo
"It's been almost six months since the yen started weakening
so if upcoming U.S. data, such as payrolls data, is weak, the
market's focus could move away from BOJ easing," he said.
The market will be looking to U.S. GDP data due at 1230 GMT
on Friday to see the extent of slowdown in the U.S. economy.
Closely watched payrolls data is due on May 3.
The euro stood at $1.3006, off Thursday's high of
$1.3094 and not far from a near-three-week low of $1.2954 hit on
The common currency is under pressure from growing
expectations that the European Central Bank may cut rates next
month to support the euro zone's moribund economy.
The British pound held firm after hitting a two-month high
on Thursday on a better-than-expected UK growth data. Sterling
traded at $1.5434, near Thursday's high of $1.5480.
Britain avoided recession in the first quarter,
wrong-footing some bearish investors, who had expected a weak
number that would push sterling lower. The data watered down
expectations that the Bank of England will add to its
asset-buying program to underpin the economy.