* Yen softer against dollar and euro
* BOJ seen maintaining massive stimulus, no new measures
* Aussie dollar awaits consumer inflation data
By Ian Chua
SYDNEY, Jan 22 The yen was on the back foot
early on Wednesday with investors unwilling to take aggressive
bets ahead of the outcome of the Bank of Japan (BOJ) policy
The BOJ is widely expected to maintain a wait-and-see stance
having embarked on a massive stimulus program last year. It
prefers not to ease again unless clear evidence emerges that a
sales tax hike in April causes far more damage than expected.
The dollar bought 104.28 yen after hitting a one-week
high of 104.75, while the euro fetched 141.40 yen off
a six-week trough of 140.33.
Against the greenback, the euro currency was trading at
$1.3558 after a directionless session that saw it hemmed
in the previous day's range of $1.3508/3569.
"Numerous markets and FX pairs attempted but failed to break
ranges, leaving a muddy near-term outlook for the Asian
morning," said Sean Callow, strategist at Westpac Bank in
"U.S. interest rates and the U.S. dollar rose into the
London morning, influenced by a (Wall Street Journal) article
from Fed-watcher (Jon) Hilsenrath saying the Fed will taper its
QE program by another $10 billion next week, but reversed in New
York despite no key data or official comment."
The dollar hit a fresh four-year high against its Canadian
peer, breaking above C$1.1000 for the first time since
It backed away from the peak after data showed Canadian
manufacturing sales rose more than expected in November to their
highest in almost two years. It was last at C$1.0966.
Still, concerns the Bank of Canada could sound more dovish
when it announces its latest interest-rate decision on Wednesday
were expected to keep the loonie pinned down.
For the Australian dollar, consumer inflation data due at
0030 GMT is key to its immediate fortunes. It traded at $0.8801
, near a 3-1/2-year trough of $0.8756 set on Monday.
"After last week's shock employment data, and with just over
a week to the first RBA meeting of the year, if the CPI data
comes in-line or below expectations, the probability of a rate
move will increase and it will put further pressure on the
ever-weakening AUD," said Evan Lucas, strategist at IG in
Economists forecasts by Reuters expect the headline consumer
price index to come in at 0.5 percent on the quarter, taking the
annual rate to 2.5 percent, bang in the middle of the Reserve
Bank of Australia's 2-3 percent target range.