Reuters: US Dollar Report: FOREX-Dollar on course for 100 yen after G20

Reuters: US Dollar Report Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

FOREX-Dollar on course for 100 yen after G20 Apr 22nd 2013, 08:57 Mon Apr 22, 2013 4:57am EDT * Dollar/yen advances towards 100 mark after G20 * G20 does not criticise Japan's radical easing policy * Euro vulnerable to flash PMI data on Tuesday By Anooja Debnath LONDON, April 22 (Reuters) - The yen slipped against the dollar towards the 100 level on Monday, after the Group of 20 countries refrained from criticising Japan's reflationary policies that have significantly weakened its currency. The dollar last stood at 99.71 yen, up 0.2 percent on the day. It had earlier climbed to as high as 99.90 yen which was within striking distance of a four-year high of 99.95 set on April 11 and the 100 level, where option barriers are cited to be lined up. A break there could trigger stop-loss buying, which could take the pair up to 101.45 yen, the April 2009 high which could act as near-term resistance. Reported large option expiries at 100 will keep the currency pinned to that level. Data last Friday showed currency speculators raised their bets against the yen in the week ended April 16, while lifting positions in favour of the U.S. dollar. The Bank of Japan governor Haruhiko Kuroda reiterated on Monday that the G20 accepted that Japan's radical easing policy was aimed at beating deflation and not at weakening the currency. "Japan not only escaped criticism, but on the contrary won praise as a country that was fulfilling its global obligations...," said Marshall Gittler, head of global FX strategy at IronFX. "That is in effect the green light for the BoJ's easing, which we expect will push USD/JPY through the magic 100 number in the not-too-distant future - perhaps as early as today." Some analysts however cautioned that the pair might face some resistance before the 100 mark ahead of a Bank of Japan meeting on Friday. "Dollar/yen hitting 100 is going to be a case of 'when' rather than 'if'," said Jeremy Stretch head of currency strategy, at CIBC. "The level will probably go but then we need to look at the durability of the move particularly as we wait for the Bank of Japan at the end of the week." The yen has weakened 23 percent against the dollar since mid-November, when Shinzo Abe, who became Prime Minister in December, promised bold monetary and fiscal expansionary policies during his election campaign. The BOJ's sweeping monetary expansion unveiled earlier this month, which aims to inject $1.4 trillion into the economy in less than two years, has given fresh momentum to yen weakness. Many market players expect the BOJ's massive bond buying to force real-money Japanese investors such as life insurers to shift more funds to higher-yielding foreign bonds. "Japanese real money investors are expected to announce further details of their investment intention for the new fiscal year over the coming days; hence, with the G20 support for BoJ policy, we expect the JPY-weakening trend to remain intact," analysts at Morgan Stanley said in a note, although they recommended staying cautious ahead of the BOJ meeting. The euro also rose against the yen, and was last up 0.2 percent at 130.08 yen,. It was nearing a three-year peak of 131.10 set earlier in the month. EURO VULNERABLE Against the dollar, the euro was down 0.1 percent at $1.3035 . The euro, which failed to break above $1.32 recently, has been stuck in a $1.30-32 range in the past week or so. Political uncertainty in Italy had kept a lid on the euro but the country's re-election of a president on Saturday has raised the prospect of an end to the two months of political stalemate that followed a general election. The common currency had also been hamstrung by persistent talk of an interest rate cut by the European Central Bank. ECB Governing Council member Ewald Nowotny on Saturday said it was too early to judge whether a cut is needed. Strategists said the euro could come under pressure if flash Purchasing Managers' Index data tomorrow disappointed. "If we don't see an element of stabilisation, let alone improvement (in the flash PMIs) then the euro could come under pressure," said Stretch adding that if the euro broke below the $1.3020-22 level it could slide to sub-$1.30 levels. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions