* Euro slips to 3-week low vs dollar after Fed minutes
* Euro/yen poised to close below 200-week moving average
By Lisa Twaronite
TOKYO, Jan 4 The dollar rose to its highest
level against the yen in nearly 2 1/2 years on Friday, while the
euro also firmed against the yen on expectations that this year
will bring more monetary stimulus by the Bank of Japan.
But the euro slipped against the greenback, touching a new
three-week low after minutes from the U.S. Federal Reserve's
last meeting indicated that while the Fed looks set to continue
buying bonds, some policymakers are reticent about further
increasing its $2.9 trillion balance sheet.
The dollar added 0.4 percent to 87.63 yen after
earlier rising as high as 87.660 yen on trading platform EBS,
its highest level against the Japanese currency since July 2010.
Tokyo markets reopened on Friday for the first day of
trading after the long Japanese New Year's holiday, with the
dollar having gained 12.8 percent against the yen in 2012 in its
biggest yearly percentage rise since 2005. Investors are betting
that the new government of Prime Minister Shinzo Abe will push
to weaken Japan's currency and implement aggressive stimulus,
and lean on the Bank of Japan to do the same.
"The yen's negatives are increasingly prominent - economic
deterioration, external weakness, geo-political conflict with
major trading partners, physical and human capital outflow, and
increasing pressure on the BOJ," Steven Englander, head of
global G10 currency strategy for Citigroup, said in a research
Moreover, he said, the run-up in US equities has pulled the
spread between benchmark 10-year U.S. Treasuries and 10-year
Japanese government bonds to their widest since early April,
which also lends support to the dollar over the yen.
Later on Friday, the U.S. nonfarm payrolls report is
expected to show the economy added 150,000 jobs in December,
according to a Reuters survey of economists, up from November's
146,000. The U.S. unemployment rate is expected to stay at 7.7
The euro gained on the yen, up about 0.4 percent
to 114.26 yen after rising as high as 114.27 yen, but it was
still far below an 18-month high of 115.995 yen set on trading
platform EBS on Wednesday.
The euro is on track to end the week below its 200-week
moving average, now at 114.89, which could signal a pullback
toward 111.45 yen, which was its March 2012 high.
Against the dollar, the euro slipped about 0.1
percent to $1.3042, after falling as low as $1.3023 on EBS, its
lowest since Dec. 12.
While the U.S. central bank looks set to continue buying
bonds, the latest Fed minutes revealed that some policymakers
believe it will be appropriate to "slow or stop asset buys well
before the end of 2013."
The euro had jumped on Wednesday, after U.S. lawmakers
reached a deal to avoid the "fiscal cliff" of tax hikes and
spending cuts that economists had feared would tip the U.S.
economy back into recession.