* Weekly data show rise in dollar-short positions,
* Euro/yen could be headed higher after close above 200-week
By Lisa Twaronite
TOKYO, Jan 7 The dollar traded close to 2 1/2
-year highs against the yen on Monday, while the euro began the
week slightly weaker against its major counterparts as investors
pondered the possible outcomes of more monetary stimulus this
year from Japan and less from the U.S. Federal Reserve.
The dollar was nearly flat from Friday's late U.S. levels,
buying 88.16 yen, not far from Friday's session high of
88.48 yen on trading platform EBS, its highest level against the
Japanese currency since July 2010.
"The 88.80 yen area is the next immediate dollar target. As
the 90 yen area is approached, it may be increasingly important
to watch how the yen performs in Asia and whether Japanese
corporates try to lock in profits or hedges," said Marc
Chandler, global head of currency strategy at Brown Brothers
Harriman, in a note to clients.
Buying dollars on modest dips is likely to be some
investors' preferred strategy, he said, adding that he
anticipates any pullbacks to be limited to the 86.80-87.30 yen
The latest positioning data suggests many investors could be
preparing for a pullback. Currency speculators increased their
bets against the greenback in the latest week, according to data
from the Commodity Futures Trading Commission released on
The value of the dollar's net short positions rose to $9.427
billion in the week ended December 31, from $6.49 billion the
previous week. It marked the fourth consecutive week of net
dollar short positions, as well as the largest position since
the week through Oct. 2, according to Reuters calculation.
The dollar posted a gain of around 2.7 percent against the
yen last week, its biggest weekly rise in more than a year.
Its gains accelerated last week after minutes from the Fed's
December meeting showed some policymakers has mulled ending
their bond-buying program as early as this year.
By contrast, many investors are now betting that Japan's new
government, led by Prime Minister Shinzo Abe, will push to
weaken the yen and push through aggressive fiscal stimulus, and
pressure the Bank of Japan to do the same on the monetary side.
Still, the key monthly U.S. jobs report released on Friday
was in line with market expectations, and suggested the Fed may
be in no rush to tighten monetary policy.
Nonfarm payrolls grew by 155,000 in December, meeting
predictions but falling short of the levels needed to bring down
the U.S. unemployment rate, which remained at 7.8 percent.
The euro was steady against the dollar, buying
1.3062, after falling to a three-week low of $1.2998 on EBS on
But the euro slipped slightly against the yen,
down around 0.1 percent to 115.13 yen, moving away from its
18-month high of 115.995 yen set on trading platform EBS on
Wednesday last week.
The euro managed a weekly close above its 200-week moving
average of around 114.84 yen last week, for the first time since
the first week of Oct 2008. Sustained break of long-term weekly
moving averages can signal major trend changes, analysts say.
The Australian dollar last traded at $1.0494, up about 0.2
percent, building on its 1.7 percent gain in 2012.
The high-beta Aussie as well as the New Zealand dollar are
unlikely to fall much in the months ahead, a Reuters poll showed
on Monday, mainly because of a lack of high yielding
The median forecast of around 47 analysts showed the
Australian dollar maintaining its current level
around$1.0400 til March, before gradually crawling lower to
$1.0100 by this time next year.
The 12-month forecasts were wide-ranging, from a low of
$0.8500 to $1.1200, suggesting uncertainty in the longer-term
Weekend news that global regulators have given banks more
time to build up cash buffers so they can divert some of their
reserves to helping struggling economies had no immediate impact
on forex markets, but could help lift investors' appetite for
Banks had complained they could not meet the January 2015
deadline to comply with a new global rule on minimum holdings of
easily sellable assets from the Basel Committee of banking
supervisors and supply credit to businesses and consumers.
The committee's oversight body agreed on Sunday to phase-in
the rule from 2015 over four years and widen the range of assets
banks can put in the buffer to include shares and