* Yen steadier as Japan GDP data, BOJ decision loom
* Dollar & euro still near multi-year highs on yen
* Sterling hit by BOE statement, Aussie dlr perks up
By Ian Chua
SYDNEY, Feb 14 The yen held near multi-year lows
against the dollar and euro on Thursday, finding a bit of
stability following a few sessions of volatile trade as the
outcome of a Bank of Japan policy meeting loomed.
The BOJ is expected to keep monetary policy steady but
signal its readiness to expand stimulus again if risks to the
The dollar bought 93.26 yen, not far off a 33-month
high around 94.47 set on Monday. The euro fetched 125.26
, near a 34-month peak of 127.71 scaled a week ago.
Analysts say markets suspect the BOJ will stand pat until
the first rate review under a new governor, scheduled for April
"This leaves the risks that the BOJ actually does positively
surprise the market. Nonetheless, it may be more prudent to wait
and buy USD/JPY on the 90 handle, as the risk trade is somewhat
stretched," analysts at Societe Generale wrote in a note.
They added that the surprise on Thursday could come from
South Korea, whose currency has risen strongly against the yen
possibly denting its export competitiveness. A Reuters survey,
however, found the Bank of Korea will probably hold rates steady
Since November, the dollar has soared around 20 percent on
the yen, while the euro has gained about 25 percent as the BOJ
came under relentless political pressure to deliver bold
policies to defeat deflation.
Markets turned nervous this week ahead of the BOJ meeting as
well as a G20 summit starting Friday, worried that Japan's
international peers would complain about the steep fall in the
A G7 statement, designed to cool international currency
tensions, did anything but that after Japan said the statement
gave it a green light to continue efforts to reflate its
economy, but a G7 official suggested otherwise.
Summing up the frustration, the Bank of England chief on
Wednesday said the G7 statement should be taken at face value
and anonymous officials should not try to reinterpret it.
Markets were also waiting for Japan's fourth quarter gross
domestic product (GDP) data due 2350 GMT, with forecasts
centring on meagre growth of 0.1 percent in the quarter. Any
downside surprise could add pressure on the BOJ to act sooner.
Volatility wasn't only confined to the yen. The euro also
saw a bit of action against the greenback, first rising to a
one-week high of $1.3520, before quickly relinquishing
those gains to last stand at $1.3451.
Resistance is seen around $1.3530, the 50 percent
retracement level of its Feb 1-11 fall.
Initially supporting the euro, data on Wednesday showed
output at euro zone factories rose for the first time since
August at the end of last year, a sign the single currency bloc
was slowly starting to pull out of recession.
Sterling took a bit of a pounding after the Bank of England
said Britain faced years of meagre economic growth and left the
door open for yet more stimulus.
It struggled near a six-month trough around $1.5523
and plumbed a record low against the New Zealand dollar at
Commodity currencies fared well with the Australian dollar
rising to $1.0367, putting a four-month trough of
$1.0227 plumbed on Tuesday well and truly in the rear-view
The bounce in the Aussie has also snapped a series of lower
lows and lower highs in the charts, hallmarks of a downtrend
after the Reserve Bank of Australia left the door open to more
rate cuts early last week.