* Boehner's comments dent budding hopes of U.S. budget deal
* Euro also seen under pressure from fragile euro zone
* Dollar/yen could fall further if U.S. budget deadlock
By Hideyuki Sano
TOKYO, Nov 30 The euro held below a one-month
high against the dollar on Friday as the market worried about
the prospects for a budget deal seen as essential to preventing
the U.S. economy from slipping back into recession next year.
The deadlock over the U.S. "fiscal cliff" also kept the
dollar in check against the yen, although it remained near a
7-1/2 month high hit last week on speculation of more monetary
easing in Japan.
"If there is no progress in the U.S. debt talk, the dollar
is likely to fall below 82 yen next week," said Masafumi
Yamamoto, chief FX strategist at Barclays in Tokyo, noting
recent U.S. economic data had not been as solid as before.
Top U.S. Republican lawmaker John Boehner, speaker of the
House of Representatives, said on Thursday there had been no
substantive progress made in resolving the U.S. budget impasse
in the last two weeks.
U.S. economic growth in July-Sept was revised up to 2.7
percent on Thursday from the initial reading of 2.0 percent
growth, but the revision was boosted by restocking by
businesses, and consumer and business spending -- more important
gauges of the economy -- were revised lower.
The dollar changed hands at 82.13 yen, flat from late
U.S. levels. It has been stuck near 82 yen for the past few
sessions after its rally had ran out of steam at a 7 1/2-month
high of 82.84 last week.
The euro, which hit a one-month high of $1.3015 on Thursday
on optimism a U.S. fiscal deal could be reached, was flat at
$1.2978 in early trade.
The euro has also been helped by fall in Spanish and
Italian bond yields in recent weeks, but many in the market
question how far it can rise, given the euro zone's fragile
The yen fell sharply earlier this month on speculation a
change in the Japanese government at a Dec. 16 election would
increase the pressure on the Bank of Japan to ease its policy,
although some of those expectations are now being pared back.
Opposition leader Shinzo Abe, the front-runner to become
prime minister, had called for radical change in monetary
policy, including unlimited easing, but some of his ideas did
not make into his party's official policy platform.
"Abe seems to be toning down a bit. For now it's hard to
expect him to say something that would further boost speculation
of more easing," said Barclay's Yamamoto.
Still, many market players think the yen could come under
selling pressure if Abe does become prime minister, limiting
potential gains in the yen before the election.
"The dollar/yen is in consolidation at the moment but bids
below 82 yen seem pretty strong. Many people think the dollar
will eventually test 84.18, so levels below 82 would be pretty
good level for entry," said Teppei Ino, currency analyst at the
Bank of Tokyo-Mitsubishi UFJ.