* Dollar/yen and euro/yen push higher
* Steadier gold, after historic plunge, soothe jitters
* Thursday's G20 meeting eyed for talk on yen weakness
By Anooja Debnath
LONDON, April 17 The yen fell broadly on
Wednesday and will likely suffer further losses in coming
sessions, succumbing to renewed pressure after a steadying of
gold prices from an earlier dramatic slide helped risk assets
The highly-liquid Japanese currency, which is usually sought
in times of financial uncertainty, rose earlier this week after
a historic plunge of around 9 percent in gold prices on Monday
and on concerns about China's slowing economic growth.
Markets, however, stabilised with spot gold finding
some ground on Wednesday, rising 1 percent on the day to
$1,380.39 per ounce.
This helped the yen resume its fall which was triggered by
the Bank of Japan's aggressive stimulus programme earlier this
month. Strategists said markets will focus on the Group of
Twenty meeting beginning on Thursday, for any comments on
concerns about the Japanese currency's weakness.
The dollar was up 0.8 percent on the day at 98.25 yen
, although still down about 1.6 percent from a four-year
high of 99.95 yen set last week. Traders cited buying by
Japanese importers earlier in the day.
The euro climbed 0.8 percent to 129.52 yen, but
stayed some way off a three-year peak of 131.10 yen hit last
"The dollar has now rebounded strongly... over the next
couple of days we might see some consolidation around current
levels but with the easing from the BOJ we think the dollar will
trade higher versus the yen," said Marcus Hettinger, global FX
strategist at Credit Suisse adding he expects the pair to hit
102 yen within the next three months.
The BOJ's radical monetary policy overhaul will pump about
$1.4 trillion into the economy in less than two years, via a
bond-buying scheme that is expected to drive Japanese investors
to look overseas in search of better yields.
Strategists, however, cautioned that the dollar was likely
prone to retracement versus the yen given its swift rise since
mid-November when Japan's current prime minister began calling
for aggressive easing as part of his election campaign.
The dollar has gained about 28 percent from its lows last
G20 IN FOCUS
In the near-term, the market will be look at the G20 meeting
beginning on Thursday, where finance ministers and central
bankers from the world's leading economies will discuss the
economic and financial market outlook, including the Cyprus
crisis and asset price reactions.
Strategists said it seems unlikely that Japan will face any
significant criticism over the BOJ's aggressive monetary easing.
"Japan's easing objective is domestic as they try to fight
deflation and they are only buying domestic assets and not
foreign bonds, so I don't think there will be any criticism
especially now after the correction lower in dollar/yen," said
A senior Canadian financial official said on Tuesday that
Canada was supportive of Japan's effort to kick-start its
economy and that the G20 believed policy should target domestic
economies and not exchange rates.
The International Monetary Fund also showed its support
saying Japan's expansion drive was not excessive and it could
help haul its economy from stagnation.
"We continue to look to use dips (in dollar/yen) to
re-establish bullish strategies. The comments from the delegates
at the IMF meetings so far appear to be supportive of the
Japanese policy approach," analysts at Morgan Stanley said.
The euro was flat against the dollar at $1.3185,
after having hit a seven-week high of $1.3202 on Tuesday, partly
helped by its bounce versus the yen.
The single currency had added to its gains on Tuesday after
breaching resistance at its 100-day moving average at roughly
$1.3155, a level which could now act as support for the euro.