SYDNEY (Reuters) - The yen held near a two-month high against the dollar and euro in early Asian trade on Monday, getting the week off to a subdued start as investors await more clarity on the Federal Reserve's next step.
Given market hysteria and confusion over when and how the Fed will begin to scale down its massive stimulus program, traders said Chairman Ben Bernanke will need to address that issue at his media briefing after the June 18-19 meeting.
"Bernanke should explain how tapering differs from tightening and should deny that the Fed has been using taper talk to trigger a repricing of fixed income markets," JPMorgan analysts wrote in a client note.
The dollar bought 94.23 yen, little changed from late New York levels, following a 3.4 percent fall last week. Immediate support is seen around 93.57, a level representing the 38.2 percent retracement of its Sep-May rally.
Traders said this level also coincides with the 93.45/55 area, which served as a solid support zone in March. A break there will bring into focus 92.57, the April 2 pre-BOJ easing low.
Uncertainty about the Fed's next move, disappointment over Japan's latest policy response and worries about a slowdown in Chinese growth have all conspired to undermine market confidence in recent weeks.
That had prompted wild swings in the Nikkei and forced investors to unwind short-yen positions. In the week ended June 11, currency speculators cut their bets against the yen for a third week, data from the Commodity Futures Trading Commission showed on Friday.
The euro fetched 125.81 yen, remaining near a two-month trough of 124.94 plumbed last week. The Australian dollar was at 90.23 yen, having slumped to a 5-1/2 month low of 88.90.
Against the dollar, the single currency was steady at $1.3347, not far off a 3-1/2 month high of $1.3390 set on Thursday.
The Aussie was flat at $0.9574. It appeared to have found an interim base since hitting a 33-month low of $0.9325 on June 11. Last week's 0.6 percent gain was its first positive performance after five consecutive weeks of falls.
There is little in the way of market-moving economic news out of Asia on Monday, leaving currency markets again at the mercy of the Nikkei.
Editing by Wayne Cole