* Upbeat U.S. non-farm payrolls supports dollar vs yen
* Euro inches up as speculators cut short positions
* Antipodean currencies boosted by better risk appetite
(Recasts, adds from comments)
By Anirban Nag
LONDON, June 9 The euro rose against the dollar
and the yen on Monday, as speculators cut large bets against the
single currency, confident the ECB will not be easing policy
Amid lower-than-usual volumes due to a holiday in some parts
of Europe, the dollar gave up some gains made after upbeat U.S.
jobs data on Friday. The reassuring data bolstered risk appetite
and underpinned higher-yielding currencies like the Australian
and New Zealand dollars.
The euro rose 0.2 percent to $1.3667, pulling further
away from a four-month low of $1.3503 hit on Thursday after the
European Central Bank cut its main rates to record lows, imposed
a negative rate on excess cash deposited with it and announced
measures to pump money into the sluggish euro zone economy, as
it seeks to ward off the risk of deflation.
But it stopped short of announcing outright purchases of
sovereign bonds, or a large expansion of its balance sheet,
factors that were likely to offer the euro support, for now.
"The ECB did not manage to increase expectations of
additional policy action to be considered anytime soon," said
Manuel Oliveri, currency analyst at Credit Agricole.
He also cast doubt on whether the cut in deposit rates into
negative territory was a game changer.
"It must be considered that a marginal deposit rate cut is
unlikely enough to have a meaningful impact on the euro-related
capital flow situation. This combined with speculative euro
short positioning close to multi-month highs should keep the
single currency subject to upside risks."
Traders said large option expiries between $1.35 and $1.37
would keep the euro in that range in the near term.
Other factors that have supported the euro this year also
remain in place. The euro zone's trade surplus is keeping
exporters' cash flowing back, European banks are repatriating
capital home to meet capital requirements and investors are
pushing more money into the peripheral bond markets.
"We would tactically go long euro/dollar looking for a move
back to the top end of this year's range," said George
Saravelos, currency strategist at Deutsche Bank, adding that the
bar for sovereign bond purchases by the ECB was pretty high.
The dollar eased to 102.42 yen, having made gains on
Friday, when data showed U.S. non-farm payrolls increased by
217,000 last month. The report offered confirmation that the
world's largest economy has snapped back from a winter slump.
Despite the yen inching up against the dollar, further gains
were unlikely, analysts said.
"Right now there is also less reason to buy the yen, with
factors such as NISA, public pension funds and corporate M&A
seen diminishing the currency's allure," said Bart Wakabayashi,
head of forex at State Street in Tokyo.
Nippon Individual Savings Account (NISA) is a new tax-break
facility for Japanese retail investors introduced in January and
aimed at driving massive savings into stocks and mutual funds,
some of which are expected to be invested in foreign assets.
Japan's public pension fund, the world's largest, has been
working to diversify its domestic bond-centric portfolio and any
changes are likely to have a significant effect on flows.
A recent increase in cross-border merger and acquisition
activity by Japanese companies is another factor seen pressuring
the yen by raising demand for foreign currencies.
Last week, Dai-ichi Life Insurance Co, Japan's
second-largest private sector insurer, agreed to buy U.S. peer
Protective Life for $5.7 billion.
There was little market reaction to a series of data out of
Japan. First-quarter economic growth was revised up to 1.6
percent from a preliminary 1.5 percent and the country posted a
current account surplus for a third straight month, albeit lower
than expected, in April.
(Additional reporting by Shinichi Saoshiro; Editing by Susan