* Yen holds near two-month highs vs dollar & yen
* Fed's June 18-19 policy meeting key focus this week
* Markets keen for clarity over Fed's next step
By Ian Chua
SYDNEY, June 17 The yen held near a two-month
high against the dollar and euro in early Asian trade on Monday,
getting the week off to a subdued start as investors await more
clarity on the Federal Reserve's next step.
Given market hysteria and confusion over when and how the
Fed will begin to scale down its massive stimulus programme,
traders said Chairman Ben Bernanke will need to address that
issue at his media briefing after the June 18-19 meeting.
"Bernanke should explain how tapering differs from
tightening and should deny that the Fed has been using taper
talk to trigger a repricing of fixed income markets," JPMorgan
analysts wrote in a client note.
The dollar bought 94.23 yen, little changed from late
New York levels, following a 3.4 percent fall last week.
Immediate support is seen around 93.57, a level representing the
38.2 percent retracement of its Sep-May rally.
Traders said this level also coincides with the 93.45/55
area, which served as a solid support zone in March. A break
there will bring into focus 92.57, the April 2 pre-BOJ easing
Uncertainty about the Fed's next move, disappointment over
Japan's latest policy response and worries about a slowdown in
Chinese growth have all conspired to undermine market confidence
in recent weeks.
That had prompted wild swings in the Nikkei and forced
investors to unwind short-yen positions. In the week ended June
11, currency speculators cut their bets against the yen for a
third week, data from the Commodity Futures Trading Commission
showed on Friday.
The euro fetched 125.81 yen, remaining near a
two-month trough of 124.94 plumbed last week. The Australian
dollar was at 90.23 yen, having slumped to a 5-1/2
month low of 88.90.
Against the dollar, the single currency was steady at
$1.3347, not far off a 3-1/2 month high of $1.3390 set on
The Aussie was flat at $0.9574. It appeared to have
found an interim base since hitting a 33-month low of $0.9325 on
June 11. Last week's 0.6 percent gain was its first positive
performance after five consecutive weeks of falls.
There is little in the way of market-moving economic news
out of Asia on Monday, leaving currency markets again at the
mercy of the Nikkei.