Reuters: US Dollar Report: FOREX-Yen crawls toward 4-month low vs dollar, euro steady

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FOREX-Yen crawls toward 4-month low vs dollar, euro steady Nov 1st 2012, 03:18 Wed Oct 31, 2012 11:18pm EDT * Yen dips on Japanese importer selling * Despite initial disappointment, BOJ easing may have teeth * Euro hobbled by uncertainty over Spain, Greece * China data not clear-cut enough to lift Aussie out of range * U.S. jobs data, election big focus By Hideyuki Sano TOKYO, Nov 1 (Reuters) - The yen dipped on Thursday, edging closer to a four-month low on Japanese importers' selling the currency and as the market viewed the Bank of Japan's latest easing steps more positively. Other major currencies were mostly steady as investors looked to crucial events in the United States in coming days, including Friday's jobs report and elections on Tuesday. The dollar rose 0.3 percent to 79.99 yen, fully recovering the lost ground on disappointment after the BOJ's easing on Tuesday and inching towards the four-month high of 80.38 hit last Friday. "Those who just trade on news headlines sold dollar/yen after the BOJ. But the BOJ's latest stance is quite aggressive as it plans to keep easy policy until deflation ends, thus likely to keep the dollar supported," said Minori Uchida, chief FX strategist at the Bank of Tokyo-Mitsubishi UFJ. On Tuesday, the BOJ increased its asset purchase programme by 11 trillion yen, a move that was roughly in line with market expectations, though some traders were betting on a bigger move, partly as the BOJ's policy meeting lasted longer than usual. The catalyst for the dollar's gain on Thursday was large bids from a Japanese importer. Analysts noted that corporate currency flows tend to favour the dollar these days because of Japan's trade deficit -- a sea change from just a few years ago when exporters' yen buying dwarfed importers' yen selling. Nonetheless, there are dollar offers from Japanese exporters above the four-month high, suggesting the dollar's further advance would likely depend on a strong job growth figure in the United States from the payrolls data, traders also said. The data is expected to show job growth picked up in October, to 125,000, but not enough to keep the unemployment rate from rising from a four-year low. Another potential boost for the dollar would be the outcome of the U.S. presidential election. There is a rough consensus in financial markets that a victory by Republican candidate Mitt Romney would lift U.S. bonds yields and dollar/yen, which often tracks U.S. bond yields. U.S. bonds are seen vulnerable to a Romney presidency because of Republican opposition to the Fed's bond buying programme as well as hopes for pro-business policies that would boost risk sentiment. But analysts also say results of Congressional elections could be equally important, as Congress will have to deal with the so-called fiscal cliff -- up to $600 billion in expiring tax cuts and spending reduction that is set to kick in next year -- which threatens to hurt the U.S. economy severely. PROGRESS? WHAT PROGRESS? The euro bought $1.2966, little changed from its New York close, having again found the going tough above $1.3000. It remained well within a $1.2800-1.3200 range seen since early September. Ongoing uncertainty about if and when Spain will seek a bailout and trigger the European Central Bank's bond-buying programme and whether Greece will secure more emergency loans continued to dog the single currency. Concerns about Greece could come under the spotlight in coming days as international lenders and euro zone finance ministers try to seal a deal to keep the near-bankrupt state afloat at a euro zone finance ministers' conference on Nov. 12. German Finance Minister Wolfgang Schaeuble said there was considerable progress after a euro zone teleconference on Wednesday, but another person on the call said there was no real progress because the International Monetary Fund remained at loggerheads with Germany on the need for European government lenders to participate in reducing Greece's debt burden. Parliament in Athens took a step forward by narrowly passing a required privatisation measure, but the precariousness of the government's majority fuelled doubts about the passage next week of other more contentious reforms international lenders demand. Prime Minister Antonis Samaras has said that the country's euro cash reserves are running out on Nov. 16, unless it gets fresh bailout money. The Australian dollar hardly budged as Chinese manufacturing data pointed to a tentative recovery but lacked the punch to dispel concerns about further slowdown. The Aussie stood flat at $1.0371, near the top of its $1.02-1.04 range of the past few weeks. Link this Share this Digg this Email Reprints

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