(New throughout, changes dateline from previous TOKYO/SYDNEY)
* Yen edges higher as BOJ begins two-day policy meeting
* Dollar nurses modest losses as jobs report disappoints
* Little data to go on this week, eyes on central bank
* BoJ, IMF meetings in focus
By Patrick Graham
LONDON, April 7 The dollar lost more ground
against the yen and dipped against the euro on Monday, jobs data
on Friday disappointing those who had bet on a number strong
enough to break this year's tight trading ranges.
A stronger dollar was to have been this year's big play on
major currency markets, according to many banks and investment
houses in January, and there were signs last week the U.S.
currency was finally set to break out higher.
But non-farm payrolls on Friday was judged short of the
decisive evidence of a strengthening economic recovery that
would firm up expectations of higher U.S. interest rates and
strengthen the dollar in the months ahead.
In that context, even the signs last week that the European
Central Bank is closer to outright money-printing have failed to
shift the U.S. currency significantly higher against the euro.
"At the end of the day we had a number that was right in the
middle; enough to keep expectations of tightening by the Fed
right where they were," said Simon Derrick, currency strategist
with BNY Mellon in London.
"The amazing thing to me, however, is how much people have
just looked at the promise of quantitative easing by the ECB and
The euro did take a hit last week from signs at the ECB
meeting that German resistance to outright money-printing is
weakening. But on Monday it was trading at $1.3715, up 0.1
percent on the day and in the upper half of the 5 cent range it
has held in this year.
The yen had lost almost 3 percent against the dollar in the
two weeks before Friday's payrolls numbers. It has gained more
than 1 percent since. At 103.14, it was up 0.2 percent in
early European trading compared to Friday's U.S. close.
There is still the prospect of more money-printing to come
in Japan itself, however, and Monday's moves were limited by
caution as the Bank of Japan began its two-day policy meeting.
"There's some consolidation, given it's a Chinese holiday so
liquidity is thinner, and directional leads are lacking," said
Sue Trinh, currency strategist at RBC Capital Markets.
"Not much is expected from the BOJ, though never say never."
BOJ Governor Haruhiko Kuroda might come under pressure to
take more easing action to support the economy after Japan hiked
its sales tax this month.
Data scheduled for early Tuesday is expected to show Japan's
current account balance probably swung back to a surplus for the
first time in five months in February, helped by overseas
investment returns and slowing import growth.
Similarly, in Europe a raft of ECB speakers this week will
flesh out what markets understand about the discussions at last
week's meeting in Frankfurt.
The running assumption is that there has been a change in
tone, but the jury is still out on whether the bank will walk
the talk and ease policy further to weaken the euro and prod
growth and inflation higher.
"If you look at (ECB President Mario) Draghi's comments in
the past month, the one clear theme is that he is concerned over
the euro," Derrick said.
"And if QE has shown us one thing over the past decade, it
is that it will work to weaken the currency. It is extraordinary
in that context that we have seen so little reaction."
A raft of senior officials will be in Washington at the end
of the week for the IMF's spring meetings. Several ECB
policymakers are due to speak on Monday.
German newspaper Frankfurter Allgemeine Zeitung said the ECB
had modelled the effects of buying a trillion euros of assets to
ward off deflation, a day after the head of the ECB said radical
policy action might be needed.
(Additional reporting by Lisa Twaronite and Ian Chua, Editing
by Angus MacSwan)