* BOJ holds policy steady, downgrades view of exports
* Euro shows resilience, bids at $1.3850 support for now
* BOE's Carney to face grilling over FX rigging allegations
By Anirban Nag
LONDON, March 11 The yen edged up on Tuesday
after the Bank of Japan stood pat on monetary policy and its
chief, Haruhiko Kuroda, said there was no need to adjust
monetary policy for now.
The BoJ maintained its massive monetary stimulus, as widely
expected, and stuck to its view that economic growth and
consumer price increases remain on track. It downgraded its view
of exports but upgraded its view of capital expenditure and
The dollar was slightly lower at 103.20 yen, trading
at the bottom of the 103.19-103.43 yen range. The euro was down
0.2 percent at 142.95 yen, off a recent two-month
high of 143.79 yen.
The yen is also a safe-haven currency, so it's been
supported by worries over Chinese growth and conflict between
Russia and Ukraine.
"Dollar/yen has been in a range between 101-104 yen for much
of this year, and the yen needs a fresh trigger for the next leg
of weakness," said Peter Kinsella, currency strategist at
Commerzbank. "That could come from a steady deterioration in
Japan's trade and current account deficits."
Analysts also said further yen weakness could come if the
BoJ indicated it was ready to ease policy further to cushion the
economy from the adverse impact of a sales tax hike.
The BoJ's next meeting on April 30 comes after a sales tax
increase scheduled to take effect on April 1. The central bank
will also release its semi-annual economic outlook then, which
investors say could give it an opportunity to alter its outlook
and justify a policy move.
"In order to ease, they have to change their way of looking
at the economy, and currently they think the economy looks okay,
so they don't feel they need to do anything at all," said
Tadashi Matsukawa, head of Japan fixed income at PineBridge
Data on Monday underscored the recovery remains fragile.
Japan posted a record current account deficit in January, and
its fourth-quarter gross domestic product growth was revised
down, suggesting the effects of BoJ easing might have begun to
The euro edged down about 0.1 percent against the dollar to
$1.3865 but remained not far from a 2 1/2-year peak of
$1.3915 hit on Friday. Traders cited bids at $1.3850 which would
check losses in the near term.
The euro held most of its ground as the European Central
Bank signalled it was unlikely to ease policy, despite slowing
inflation, and said the currency's strength was having only a
marginal impact on imported inflation.
The European session will see Bank of England chief Mark
Carney testify to UK lawmakers concerning allegations of the FX
market has been manipulated. The central bank suspended an
employee last week in connection with an investigation into the
Meanwhile, the New Zealand dollar hit a post-float high
against a currency basket before a widely expected rise in New
Zealand interest rates on Thursday. On a trade-weighted basis,
the kiwi rose as high as 79.51, according to Reuters
data, its highest level since the currency was floated in 1985.
The Reserve Bank of New Zealand is set to raise rates and
lay out a path for a series of increases over the next two
years, according to a Reuters poll.