* Yen off last week's lows as BOJ Kuroda dismisses
* Dollar index edges up but still near 3-week low
* Aussie dollar hits fresh 2014 highs vs USD
By Lisa Twaronite and Ian Chua
TOKYO/SYDNEY, April 9 The dollar retook a bit of
the ground it lost in the previous session but still languished
near a three-week low against a basket of major currencies on
Wednesday, having broken decisively lower as the yen squeezed
higher and the euro gained a tailwind.
Traders said the yen's sharp ascent was sparked in part by
comments from the Bank of Japan's governor on Tuesday that
dismissed any need for additional stimulus. Recent remarks from
European Central Bank officials similarly suggested no urgency
for any immediate policy action, underpinning the common
BOJ Governor Haruhiko Kuroda said on Tuesday that there was
no need for additional stimulus to pull Japan out of deflation,
and expressed confidence the world's third-largest economy can
ride out the impact of this month's increase to the national
The dollar skidded more than 1 percent against the yen on
Tuesday in its biggest one-day fall in over seven months to
101.55, its lowest since March 19.
It drifted back up to 102.01 yen, up about 0.2 percent on
the day, but well shy of Friday's 2-1/2-month high of 104.13
yen. The euro also added about 0.2 percent, to 140.68 yen
Many Japanese traders who had not been expecting any central
bank action this month were surprised that overseas market
participants apparently took Kuroda's words as a fresh cue to
buy back yen.
"To be honest, there were quite a few people shaking their
heads, not understanding this whole move overnight, but the
explanation seems to be BOJ disappointment," said Bart
Wakabayashi, head of forex at State Street in Tokyo.
"I don't think there were any expectations they (the BOJ)
would do anything, and even if there were, it would have been
pre-April, so now that we're through the tax hike and they
haven't done anything, I don't see a reason for them to do
anything now without any hard evidence of a slowdown," he said.
Kuroda's remarks caught the market long of U.S. dollars and
very short of yen, which helped knock the dollar index to
a low of 79.709 on Tuesday. It was last slightly higher on the
day at 79.792.
The euro climbed as far as $1.3812 on Tuesday,
pulling further away from Friday's trough of $1.3672, and was
last steady on the day at $1.3792.
The Australian dollar was up 0.1 percent against the
greenback at $0.9367, after breaking through tough resistance at
$0.9310 to reach $0.9385 on Wednesday, a high not seen
since Nov. 20.
Analysts at BNP Paribas said that the dollar was not down
for the count, and that it could make a solid comeback soon.
"We expect the USD to regain its feet in the weeks ahead as
improving U.S. data puts renewed upside pressure on U.S.
yields," they wrote in a note to clients.
"We closed our USD/JPY long recommendation flat on Tuesday
as the pair fell through our trailing stop set at our entry
level. However, we think the pair is likely to hold above the
year's lows around 100.80 and expect the March lows around
101.20 to also provide good support."
(Editing by Chris Gallagher)