* Expectations of more BOJ easing to temper yen gains
* Euro supported by view ECB will keep rates unchanged
By Lisa Twaronite
TOKYO, Jan 9 The yen continued to rise against
the dollar and the euro in early Asian trading on Wednesday
despite expectations of further easing steps from the Bank of
Japan, as investors locked in gains.
The euro dropped to 113.80 yen after falling as
far as 113.55 yen, its lowest level since late December. It
broke below its 14-day moving average for the first time since
Dec. 11 and is moving further away from its 18-month high of
115.995 yen set on the EBS trading platform last week.
The dollar lost around 0.2 percent to 86.96 yen,
falling as low as 86.83 yen in early trading. On Friday, the
first Japanese trading day of 2013, the greenback hit a 2-1/2
year high of 88.48 yen on EBS, after surging 12.8 percent
against the yen in 2012 in its biggest yearly percentage rise
"Late last year, the yen sharply weakened in thin
conditions. If you had to take a market position, could you see
any reason to buy yen? No, so the yen was sold," said Kimihiko
Tomita, head of foreign exchange for State Street Global Markets
"But markets can't keep moving for weeks on the same
factors, even when the overall trend remains the same, so in the
short-term, the yen started moving up again."
Japan's new government led by Prime Minister Shinzo Abe is
rushing this month to complete a new policy accord with the BOJ
and an economic stimulus package that will be the first test of
whether he can deliver on his ambitious economic agenda to pull
the country out of deflation.
The BOJ's next meeting will be on Jan. 21-22, when
policymakers will debate raising its inflation target to 2
percent from the current 1 percent, as Abe has called for.
The euro was nearly flat against the dollar from late
U.S. levels, changing hands at $1.3082, with support at $1.30
holding after the European unit fell to a three-week low of
$1.2998 on EBS on Friday.
The euro is likely to be supported this week by expectations
the European Central Bank will hold off on cutting interest
rates at its regular policy meeting on Thursday, though some
investors and economists believe cuts will come later this year.