* Dollar regains ground against yen after minister remarks
* BOJ meeting on Jan. 21-22 in focus
* Euro up vs dollar, hits 13-month high vs Swiss franc
By Anooja Debnath
LONDON, Jan 17 The dollar rose against the yen
on Thursday after Japan's economics minister said his recent
comments on the negative impact of yen weakness had been
Strategists said the overall trend of dollar strength
against the yen was intact despite the U.S. currency losing
ground for nearly three sessions as investors took profit on
bets against yen weakness after Economics Minister Akira Amari's
comments on Tuesday.
The dollar rose 0.6 percent to 88.90 yen. Traders
cited strong support at 87.80 yen, the low struck on Wednesday
with stop-loss sell orders at 89.20 yen and an option barrier
cited at 90 yen which could act as resistance.
The dollar's latest rebound could see it test a 2-1/2-year
high of 89.67 yen hit on Monday.
Analysts said the yen fell after Dow Jones newswires quoted
Amari as saying it was regrettable that his remarks on the yen
on Tuesday had been misinterpreted.
Amari had said on Tuesday that excessive yen weakness could
have a negative impact on people's livelihoods through higher
import prices. His comments had triggered a fall in the dollar
against the yen.
But strategists said such pullbacks in dollar/yen were
temporary given pressure on the Bank of Japan to ease monetary
policy and weaken the yen.
"There seems to be a very firm belief this trend (of
dollar/yen rising) will continue," said Niels Christensen, FX
strategist at Nordea. "The pattern is that every time there has
been a recovery in the yen it has been small and investors are
quick to put on new short yen positions."
The BOJ is widely expected to adopt a 2 percent inflation
target and perhaps extend its asset purchase programme at its
policy meeting on Jan. 21-22. If the BOJ failed to exceed
expectations the dollar could again falter against the yen.
"The BOJ will probably disappoint to some degree. They'll
deliver what the market expects but no more than that," said
Gareth Berry, G10 FX strategist for UBS in Singapore.
The dollar will probably fall against the yen if that turns
out to be the case, Berry said. "But I'd see that as a (dollar)
buying opportunity ahead of the changing of the guard in April,"
Japanese Prime Minister Shinzo Abe has said he would like to
choose someone who can implement aggressive monetary policy to
succeed present BOJ Governor Masaaki Shirakawa, whose term ends
The euro was up 1 percent at 118.75 yen, not far
from the 20-month peak of 120.13 hit on Monday.
The euro hit a session high of $1.33535 as stop-loss
buy orders were triggered at $1.3330 with Middle East sovereign
investors buying the common currency, traders said.
Surprisingly upbeat comments from European Central Bank
President Mario Draghi last Thursday, which saw bets on further
near-term policy easing pared back, have supported the euro.
It hit a 13-month high against the Swiss franc of 1.24470
francs. Traders said the euro rose past a reported
options barrier at 1.2450. The dollar was also up 0.2 percent
against the franc, with traders citing a large European
bank as the main buyer of the pair.
The euro is expected to extend gains after a Spanish bond
auction, which strategists say is likely to draw strong demand.