* USD/JPY dips early on exporter selling
* Extends losses as speculators target stops at 77.20, 77.00
* Euro among best performers this week, up 1.7 pct vs USD
* Aussie, NZD near 3-month peaks after USD post-Fed dip
By Antoni Slodkowski
TOKYO, Jan 27 The yen was on track to post
its biggest daily gain in a month against the dollar on Friday,
as exporters stepped up month-end purchases and hedge funds
piled in, triggering stop losses, traders said.
Japanese corporates sold the dollar which had been drifting
lower after hitting a two-month high this week. This prompted
hedge funds to follow suit, pushing the greenback through
support at its 100-day moving average of 72.20 yen.
The dollar sank as low as 76.90 yen and came close to a
support at a trendline off its Oct. 31 low at 76.70 yen.
"Exporters were aware that the bullish yen trend hasn't
changed and this week's squeeze may have been their only chance
to sell at higher levels for another couple of months," said a
senior spot trader for a major Japanese bank who did not want to
be identified by name.
The dollar hit a two-month high of 78.29 yen on Wednesday
after Japan reported its first annual trade deficit since 1980,
but the rally stalled right below resistance at its 200-day
"The yen will now likely get stuck in its familiar
tight range, at least for the next few weeks," the trader said.
On the back of the move against the dollar, the yen also
muscled in on the euro, pulling it 0.5 percent lower to 100.96
The single currency managed to hold onto hefty gains against
the dollar, made in the wake of the Federal Reserve's pledge to
keep rates near zero for the next three years which encouraged
dollar carry trades.
The Fed's move pushed the greenback to a five-week low on
the euro overnight. The euro traded at $1.3096, on track
to be one of the week's best performers with a gain of 1.7
percent. It touched a high of $1.3184 on Thursday but faltered
short of major resistance in the $1.3199-1.3237 zone.
But analysts thought the dollar unlikely to stay under
pressure for much longer at least against the euro.
"We may see one more round of selling in the dollar, but I
think everyone knows that the unresolved problems in Europe will
come to the fore sooner or later, so the dollar will likely stay
supported longer-term," said Sumino Kamei, a senior currency
analyst at Bank of Tokyo-Mitsubishi UFJ.
Kamei said Greece continued to pose an immediate threat to
the euro's recent gains as debt talks between it and private
creditors resume on Friday.
Greek media reported that debt holders may be ready to
accept a yield of 3.75 percent on new Greek bonds after euro
zone ministers rejected an offer of 4 percent on
The Fed's decision encouraged the use of the dollar in carry
trades and sparked big gains for gold and copper. The dollar
index was at 79.41, recovering a little from 79.067 --
its lowest in over six weeks hit on Thursday.
It also supported commodity currencies, with the Australian
and New Zealand dollars hovering near three-month highs. The
kiwi has been a clear outperformer this year with a
gain of 5.6 percent, while the Aussie has added more
than 3.8 percent.
The United States will release GDP numbers later on Friday
with forecasts pointing to a 3 percent bounce in the