* Econ min Amari says excessive yen weakness negative for
* Bernanke suggests Fed in no hurry to withdraw stimulus
* Euro buoyed by ECB outlook, receding crisis fear
* Dollar/yen down 0.6 pct, euro/dollar flat near 11-month
* Euro near 13-month high vs Swiss franc, 9-month high vs
By Hideyuki Sano and Ian Chua
TOKYO/SYDNEY, Jan 15 The yen rebounded from a
2-1/2-year low on Tuesday after Japanese Economics Minister
Akira Amari's remarks that excessive yen weakness could have a
negative impact on the country sparked profit-taking in heavy
bets against the Japanese currency.
The dollar was also weighed down by comments from the head
of the Federal Reserve suggesting the U.S. central bank was in
no hurry to withdraw monetary stimulus from the world's biggest
The dollar dropped about 0.6 percent to 89.95 yen on
the day, having fallen as low as 88.62 point at one point after
Amari said excessive yen weakness could hurt the livelihood of
people by boosting import prices.
On Monday, the dollar rose as high as 89.67 yen, its highest
level since June 2010, as many traders had sold the yen
aggressively in recent weeks on expectations the Bank of Japan
will be forced to take bold action to jump-start a sluggish
The BOJ is under unrelenting pressure from newly elected
Prime Minister Shinzo Abe to beat deflation once and for all.
Earlier, the U.S. currency also failed to extend its recent
gains to test the big number of 90 yen as U.S. Fed chief Ben
Bernanke said the recovery was still fragile and warned the
economy was at risk from political gridlock over the deficit.
His comments also came after the president of the San
Francisco Federal Reserve Bank, John Williams, said he expected
the central bank's bond buying would be needed "well into the
second half of 2013."
"Overall, these remarks do not change our view that QE3 will
continue into at least the end of 2013 as the recovery remains
moderate, while we also see downside risks for the economy
stemming from the debt ceiling uncertainty," said Vassili
Serebriakov, strategist at BNP Paribas.
The Fed's stance stood in contrast to a more upbeat European
Central Bank, which recently said the euro zone economy will
recover later in 2013 and there are already signs of
Against this backdrop, the euro was buoyed near an 11-month
high, with receding worries over a full-blown financial crisis
in Europe encouraging investors to shift some funds back to the
The euro last traded at $1.3375, flat on the day
after having risen as far as $1.3404 on Monday, its highest
level in 11 months. Immediate resistance was seen around
$1.3490, a level that had capped the currency last year.
The single currency outperformed many of its peers over the
last few sessions.
One standout performance on Monday was the euro's 1.2
percent rally against the Swiss franc, taking it well
above 1.2300 francs for the first time since December 2011.
"It had lagged the rise in EUR/USD and is now busy gapping
aggressively higher and taking out layer after layer of strikes.
It is happening very quickly," said Sebastien Galy, strategist
at Societe Generale.
"Market makers are panicking leading EUR/CHF vols to move
explosively higher in the front end. The next layer of strikes
is reportedly between 1.24 and 1.25, though looking at price
action it seems that we hit a layer of strikes every 20 pips or
The euro also held near a nine-month high against the
British pound, last trading at 0.8311 pound after
having risen as high as 0.8326 on Monday.
Against the yen, the euro scaled a fresh 20-month peak of
120.13 on Monday before Amari's comments lifted the
yen from lows. It last stood at 119.02 yen.