* Dollar/yen pulls back from Friday's 2-1/2-year high
* Last week's close above 200-week MA bodes well for
* Possible complication to Softbank-Sprint deal supports yen
By Masayuki Kitano
SINGAPORE, Jan 7 The dollar slipped against the
yen on Monday but remained near a 2-1/2-year high, as investors
pondered the possible outcome of more monetary stimulus this
year from Japan and less from the U.S. Federal Reserve.
The dollar fell about 0.1 percent to 88.08 yen,
inching away from Friday's session high of 88.48 yen on trading
platform EBS, the greenback's highest level against the Japanese
currency since July 2010.
Although the dollar may pull back against the yen given the
speed of its rise over the past month, its uptrend seems likely
to remain intact, said Hiroshi Maeba, head of FX trading Japan
for UBS in Tokyo.
"My sense is that the market could still head much higher,"
Maeba said. "I think 90 yen might be reached pretty soon," he
said, adding that the dollar could head toward 95 yen over the
next six months and possibly as early as March.
In addition to hopes for the new Japanese government's
economic policies, the yen is likely to stay under pressure due
to Japan's trade deficits and yen-selling related to Japanese
firms' acquisitions of overseas businesses, Maeba said.
"The market's supply and demand balance (for dollar/yen) has
changed significantly," he said, adding that such a shift had
taken place over the course of the past year or so.
The dollar took a breather after having climbed 2.7 percent
versus the Japanese currency last week, the greenback's biggest
weekly rise against the yen in more than a year.
Its gains accelerated last week after minutes from the Fed's
December meeting showed some policymakers had mulled ending
their bond-buying programme as early as this year.
By contrast, many investors are now betting that Japan's new
government, led by Prime Minister Shinzo Abe, will move to
weaken the yen and push through aggressive fiscal stimulus, and
pressure the Bank of Japan to do the same on the monetary side.
Traders said the yen found some support on Monday on
worries that Japanese mobile operator Softbank Corp's
deal to buy 70 percent of U.S. carrier Sprint Nextel Corp
could run into some complications.
The general counsel for investment fund Crest Financial said
on a call with reporters on Friday that it will ask the U.S.
Federal Communications Commission to block Sprint's plan to sell
70 percent of itself to Softbank Corp for $20 billion.
"Some people say that this is triggering yen-buying in
dollar/yen and on the yen crosses," said a trader for a Japanese
bank in Bangkok.
For now, however, profit-taking seems to be the main factor
weighing on the dollar against the yen, the trader said.
Softbank Corp's $20 billion deal to buy about 70 percent of
Sprint, announced in October, had refocused attention on
Japanese firms' interest in overseas acquisitions and been
viewed as a supportive factor for the dollar against the yen.
The euro fell 0.3 percent against the yen to 114.89 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 114.97 yen last week. A sustained break of
such long-term moving averages can signal major trend changes,
Against the dollar, the euro eased 0.2 percent to $1.3044
, after falling to a three-week low of $1.2998 on EBS on