April 3, 2013 / 3:46 AM / 5 years ago

FOREX-Yen slips slightly versus dollar, market awaits BOJ

* Yen drifts off one-month high vs USD

* Euro & sterling pressured after more weak data

* Markets wary ahead of central bank meetings

By Masayuki Kitano and Ian Chua

SINGAPORE/SYDNEY, April 3 (Reuters) - The yen inched lower versus the dollar on Wednesday while the euro edged lower in a market largely lacking conviction ahead of policy decisions by the Bank of Japan and European Central Bank on Thursday.

Yen bears are worried the BOJ, in its first policy review under new governor Haruhiko Kuroda, might not live up to expectations as markets are already positioned for aggressive stimulus measures.

The dollar firmed 0.1 percent to 93.50 yen, inching away from a one-month low of 92.57 yen set on Tuesday. The dollar was still some way off a 3-1/2 year high of 96.71 yen set last month.

“The bar is high for the BOJ to meet or exceed market expectations,” said Roy Teo, FX strategist for ABN AMRO Bank in Singapore.

Still, Kuroda will probably provide some forward guidance on the prospects for further stimulus measures, and that may help support the dollar against the yen, Teo said.

“I do see the 90 to 91 level as quite good support for dollar/yen,” he added.

Another possible short-term support for the dollar lies at about 92.11 yen, which is the top of the cloud on the daily Ichimoku chart, a popular technical analysis tool.

The BOJ is widely expected to ramp up its bond buying and extend the maturities of the bonds it purchases at the April 3-4 policy gathering.

Kuroda said on Tuesday that he wants to combine two different schemes that the central bank uses to purchase government debt, reinforcing expectations of bold monetary stimulus.

Combining the schemes would allow the BOJ to buy longer-dated bonds more easily and clarify how much it is expanding its balance sheet.

“Much of the BOJ dovishness is already priced in and traders remain wary of jumping into short yen positions at current levels,” said Vassili Serebriakov, strategist at BNP Paribas.

The euro slipped 0.1 percent versus the dollar to $1.2804 , staying within sight of a four-month low of $1.2750 set last week.

The single currency has sagged back down after hitting a one-week high of $1.2878 on Tuesday, weighed down by euro zone data showing the region was well into economic contraction territory last month.

Markit’s Eurozone Manufacturing PMI, released on Tuesday, showed that manufacturing across the euro zone fell deeper into decline in March.

This has prompted expectations European Central Bank President Mario Draghi would strike a more dovish tone at Thursday’s monetary policy meeting. The ECB is widely expected to keep interest rates unchanged at a record low of 0.75 percent at this week’s meeting.

The Bank of England is also likely to hold steady at its policy decision on Thursday but more action in the form of renewed government bond-buying is expected soon.

The market has been giving sterling a wide berth and piled pressure on the currency on Tuesday after data showed British manufacturing activity shrank for a second consecutive month in March.

The pound slipped 0.1 percent to $1.5086. Against the New Zealand dollar, sterling last stood at NZ$1.7942 , having hit an all-time low near NZ$1.7915 on Tuesday.

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