* Dollar/yen still wobbly after Friday's 1.3 pct drop
* U.S. Q1 GDP growth accelerated but missed expectations
* Focus on Fed and ECB policy meetings, U.S. data
By Masayuki Kitano
TOKYO, April 29 The dollar eased versus the yen
on Monday, staying on the defensive after sliding on Friday,
when data showed the U.S. economy grew at a slower-than-expected
pace in the first quarter.
The dollar last changed hands at 97.86 yen, down 0.1
percent from late U.S. trade on Friday and well below a
four-year high of 99.95 yen set on April 11, a week after the
Bank of Japan stunned markets with its drastic monetary stimulus
The dollar had dropped roughly 1.3 percent versus the yen on
Friday, when the BOJ held off from announcing new monetary
initiatives at its latest policy meeting, and U.S. first-quarter
growth came in below the market's expectations.
U.S. gross domestic product expanded at a 2.5 percent annual
rate in the first quarter. Economists had expected a 3.0
percent growth pace.
The GDP report, which also showed a deceleration in
inflation, provides ammunition for the Federal Reserve to
maintain its monetary stimulus. The U.S. central bank, which
holds a two-day policy meeting that starts on Tuesday, is widely
expected to keep purchasing bonds at a pace of $85 billion a
"There is a risk, I think, that the Fed sounds a little bit
more dovish than we've become accustomed to," said Gareth Berry,
a Singapore-based G10 FX strategist for UBS.
Despite such a risk, however, the dollar is likely to find
support versus the yen due to the BOJ's aggressive monetary
easing, Berry said.
"We're still bullish dollar/yen. The BOJ story still has a
long way to run," he added.
Besides the Fed's policy meeting. U.S. economic data will be
a focal point this week, especially the closely watched jobs
data due on Friday.
The euro edged up 0.1 percent to $1.3039.
Growing expectations that the European Central Bank may cut
interest rates at its policy meeting on May 2 to support the
euro zone's recession-hit economy have kept a lid on the euro,
which has retreated since hitting a seven-week high of $1.3202
on April 16.
While the progress in Italy toward ending a two-month
political impasse is positive for the euro, it is unlikely to
give the single currency any major boost, said Roy Teo, FX
strategist for ABN AMRO Bank in Singapore.
Italian centre-left politician Enrico Letta named a
coalition government on Saturday, ending two months of damaging
Letta is expected to set out his government's plans in
parliament on Monday and will then need to win a vote of
confidence in both houses to be fully empowered.