* Brainard says U.S. supports Japan's efforts to end
* Investors await G20, BOJ meetings this week
By Lisa Twaronite
TOKYO, Feb 12 The yen wallowed around the
previous session's lows in early Asian trading on Tuesday after
a U.S. Treasury official voiced support for Japan's efforts to
end stubborn deflation.
The dollar was buying 94.25 yen, steady from late
North American trade on Monday when it rose as high as 94.465
yen on the EBS trading platform, its highest level since May
The euro was steady at 126.27 yen after jumping 2
percent against the Japanese unit on Monday, moving toward a
34-month high of 127.71 yen hit on Wednesday last week.
U.S. Treasury Undersecretary for International Affairs Lael
Brainard said the United States supports Japanese efforts to end
deflation and re-invigorate growth.
"It's a tacit way of saying, we don't have a problem if the
result is a weaker yen," said Andrew Wilkinson, chief economic
strategist at Miller Tabak & Co. in New York.
"I think the yen's weakening is a function of
(playing)catch-up," and not Japan resorting to deliberate
devaluation of its currency, he said. "It's the market's way of
saying, we're convinced there is a movement afoot to reinflate
The remarks came ahead of a meeting of euro zone finance
ministers on Monday and a G20 meeting later in the week, which
are likely to focus on whether some countries are deliberately
trying to weaken their currencies.
The Group of Seven nations are considering issuing a
statement this week reaffirming their commitment to "market
determined" exchange rates in response to recent rhetoric about
a currency war, two G20 officials said on Monday.
France said on Monday that euro zone finance officials should
discuss the rising strength of the euro, but several ministers
played down the issue and the G7 was expected to call for
"market-determined" exchange rates.
The euro also benefited from comments from European Central
Bank council member Jens Weidmann, who said discussions about an
overvaluation of the euro are simply a diversion from
governments' task of sorting out their economies. He added that
a currency policy aimed at weakening the euro would lead to
Against the dollar, the euro was steady from North American
levels, buying $1.3406, moving toward a 15-month peak of
$1.3711 set on Feb. 1 and away from its Feb. 8 low of $1.3353.
The Bank of Japan will hold its regular policy meeting on
Wednesday and Thursday, and is expected to keep monetary policy
steady for now.
Still, markets are pricing in more easing to come as the
government of Prime Minister Shinzo Abe has kept steady pressure
on the central bank to take bold action to achieve its new 2
percent inflation target.