* Yen comes under renewed pressure vs dollar and euro
* Euro investors position ahead of Thursday's ECB meeting
NEW YORK Jan 9 The dollar climbed against the
yen on Wednesday, moving back towards a recent 2-1/2 year high,
as positioning for expectations of easier Bank of Japan
monetary policy led some investors to sell the Japanese
Yen sentiment has been volatile as the BOJ Jan. 21-22 policy
meeting approaches, but traders said the dollar's pullback in
the previous two sessions had lured investors waiting for a
chance to buy on dips. Speculation that the BOJ could deliver
further aggressive easing steps has capped any gains even when
it did rally.
"Looking ahead to the BOJ later this this month, investors
are a little hesitant to bid the yen up too much higher," said
Omer Esiner, chief market analyst, at Commonwealth Foreign
Exchange in Washington. "The outlook for additional easing is
keeping a lid on the yen to the upside."
The dollar rose 0.6 percent on the day to 87.51 yen,
lifting off a near one-week low of 86.81 hit earlier in the
session. That low marked a loss of about 1.8 percent from last
Friday's peak of 88.40 yen, using Reuters data.
Sources familiar with the BOJ's thinking said the central
bank was likely to adopt a 2 percent inflation target at the
meeting, double its current goal, and issue a statement with the
government promising bold monetary easing steps.
The BOJ will also consider easing monetary policy again this
month, probably through an increase in its 101 trillion yen
($1.2 trillion) asset buying and lending programme, the sources
Expectations that Japan's newly elected government led by
Prime Minister Shinzo Abe would push the BOJ to adopt more
forceful monetary stimulus measures have driven the yen sharply
lower in recent months. But the dollar and the euro eased
against the yen this week as investors locked in profits after
At Friday's peak, the dollar had gained nearly 12 percent
against the yen since early November, and traders said the rally
was due for a pause.
"After a 10-12 percent rise, there is bound to be some
consolidation and a shakeout could possibly see dollar drop to
84 yen," said Howard Jones, partner at money manager RMG Wealth
Management in London.
"But any consolidation will be short-lived. From a macro
view, with a huge change of policy taking place in Japan and the
government determined to drive the yen lower, one must not
underestimate them. We are looking at the dollar hitting 100 yen
during the course of this year."
On Wednesday, Abe reiterated his call to the BOJ to take
sufficient steps to achieve a 2 percent inflation target while
Finance Minister Taro Aso called for aggressive measures to beat
The yen's weakness helped the euro, which rose 0.4 percent
to 114.26 yen, but was still some way from an 18-month
high set on Jan. 2.
The euro was 0.2 percent lower at $1.3054, easing
after German industrial output rose less than forecast in
November, although bids from sovereign investors at $1.3040 were
likely to check a sharp drop. The session low posted as the New
York session got underway at $1.3042.
Some strategists said expectations the European Central Bank
will keep its interest rates on hold on Thursday were also
likely to support the euro, although some investors and
economists believe rates will be cut later this year.
Some US$2.6 billion in euros had changed hands through the
global session on Wednesday, according to Reuters Dealing