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FOREX-Yen firmer vs dollar, awaits new BOJ governor's remarks
March 21, 2013 / 4:21 AM / 5 years ago

FOREX-Yen firmer vs dollar, awaits new BOJ governor's remarks

* Dollar dips vs yen but losses limited

* Yen not too far from last week’s 3-1/2 year low vs dlr

* Markets await BOJ governor Kuroda’s maiden speech

By Masayuki Kitano

SINGAPORE, March 21 (Reuters) - The yen inched higher versus the dollar on Thursday but its gains were limited as markets waited for clues on how aggressively the Bank of Japan will ease monetary policy under its new leadership.

New BOJ Governor Haruhiko Kuroda and new Deputy Governors Kikuo Iwata and Hiroshi Nakaso are scheduled to hold a news conference from 0900 GMT on Thursday.

“I‘m sceptical that anything new can come of it, but having said that, the market clearly wants to push dollar/yen higher,” said Rob Ryan, strategist for RBS in Singapore.

“He (Kuroda) is part of a board, and it’s going to be a little difficult for him to go up there before the board has met, and promise to do anything,” Ryan said.

Still, one possibility for Kuroda might be to call an early policy board meeting ahead of the BOJ’s next scheduled policy meeting on April 3-4, Ryan added.

“That would be another powerful signal, to say we’re doing something and we’re going to get started on it straight away,” he said.

The dollar eased 0.1 percent to 95.93 yen, staying within striking distance of a high of 96.71 yen set last week, the dollar’s strongest level versus the yen since August 2009.

Market players in Tokyo said repatriation flows from Japanese investors helped weigh on the dollar against the yen on Thursday.

The dollar’s downside against the yen will probably be limited ahead of Kuroda’s news conference, said a trader for a European bank in Tokyo.

“Until then, the dollar is likely to become firm on the down side in the 95-yen area,” the trader said.

Elsewhere, the euro edged up 0.1 percent to $1.2949.

“The order board is skewed to the top side now... Stops higher and bids lower,” said a trader for a European bank in Singapore, referring to the euro.

The single currency has rebounded since hitting a four-month low of $1.28435 on Tuesday, as immediate fears about a financial meltdown in Cyprus eased, with the small island country pleading for a new loan from Russia.

The tiny European state is still scrambling to secure a deal to avert a financial meltdown, having rejected terms of a bailout from the European Union. It extended a bank lockdown to next week to prevent a run on banks and has turned to Russia for a lifeline.

The U.S. Federal Reserve on Wednesday pressed forward with its aggressive policy stimulus, saying it will continue to buy $85 billion in mortgage and Treasury bonds per month.

Fed Chairman Ben Bernanke said central bank would only slow the pace of its bond buying after the labour market showed sustained improvement.

“There will be reasonable U.S. economic growth this year and the unemployment rate will drift lower. But neither will be sufficient to induce the Fed to take its foot off the gas. The open-ended QE program is set to run into early 2014 at the very least,” said Martin McMahon, economist at Commonwealth Bank.

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