* Dollar/yen gets lift from short-covering -trader
* Post-BOJ drop in dollar/yen seen as temporary pullback
By Masayuki Kitano
SINGAPORE, Jan 24 The dollar rose against the
yen on Thursday with traders attributing the move to position
squaring by short-term players in the wake of the yen's bounce
over the past couple of days.
The yen had bounced earlier this week after the Bank of
Japan was deemed to have disappointed by not immediately
upsizing its asset-purchasing programme. This was despite the
Bank of Japan delivering its boldest policy yet to snap the
economy out of years of stagnation.
In the wake of that rebound in the yen, some short-term
traders had been left holding short positions in the dollar,
said a trader for a European bank in Tokyo.
"The market had gone short (the dollar) during that
pullback," the trader said. "For today, it seems like there has
been some short-covering," he said, adding that the dollar would
probably trade in a range of 87 yen to 90 yen in the near term.
The dollar rose 0.8 percent to 89.33 yen, pulling
away from a one-week low of 88.06 yen hit the previous day.
The dollar had hit a 2-1/2 year high of 90.25 yen on Monday.
The dollar's pullback versus the yen after the BOJ's
announcement on Tuesday has proved shallow so far and most are
of the view that dollar/yen will continue to climb over time.
"We saw a little clear out of short term speculative
positions, which is only healthy in an uptrend. I don't think
there's any change to the trend because of it," said Jesper
Bargmann, Asia head of G11 spot FX for RBS in Singapore.
"I think we will struggle to break 91, but I will still keep
looking for us to trade above 90 in the short-term," Bargmann
said, referring to the outlook for the dollar versus the yen
over the next week or so.
Yen bears have not given up, partly because BOJ Governor
Masaaki Shirakawa, whose term ends in April, is seen likely to
be replaced with a more dovish governor, who could then bring
forward any easing.
Earlier, the yen had slipped as Asian equities edged higher
after an upbeat reading of Chinese manufacturing activity
provided an encouraging sign for the global economy.
The HSBC flash purchasing managers' index, a preliminary
private survey, showed that growth in China's factory sector
accelerated to a two-year high in January.
Asian equities however, later sagged back
down. The Australian dollar also only got a brief lift from
HSBC's survey of the Chinese factory sector, and was last down
0.3 percent at $1.0525.
Earlier on Thursday, the yen showed limited reaction to data
showing a larger-than-expected Japanese trade deficit in
December, and a record trade deficit for the whole of last year.
For 2012, Japan logged a record annual trade deficit of
6.93 trillion yen ($78.27 billion).
Japan's trade deficits have been a contributing factor to
the bearish market sentiment against the yen.
The euro rose 0.9 percent against the yen to 119.13 yen
, edging back in the direction of a 20-month high of
120.73 yen set on Friday.
Against the dollar, the euro rose 0.2 percent to $1.3341