Reuters: US Dollar Report: FOREX-Yen firms on BOJ status quo, euro flat before German hearing

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-Yen firms on BOJ status quo, euro flat before German hearing Jun 11th 2013, 08:33 Tue Jun 11, 2013 4:33am EDT * Yen firms vs dollar, euro after no new BOJ measures * Investors wary about euro as German court hearing starts * Aussie slumps to lowest since Sept 2010 By Anirban Nag LONDON, June 11 (Reuters) - The yen rose on Tuesday as some investors unwound bets against the currency after the Bank of Japan refrained from taking additional measures to curb recent bond market volatility. Investors were also wary about the euro before a two-day German court hearing starting on Tuesday about the legality of the European Central Bank's bond-buying scheme, which has defused the euro zone crisis. A ruling is not expected until after German general elections in September. The dollar fell to 97.78 yen and was last trading down 0.7 percent at 98.15 yen, after the BOJ held off from extending the maximum duration of its fixed-rate loans to two years from one, a measure some had expected. The euro was down 0.7 percent at 129.97 yen. BOJ chief Haruhiko Kuroda, who unleashed at $1.4 trillion stimulus programme in April, left the door open to address bond market volatility in the future, but said there was no current need for new tools to stem sharp swings. "There were some expectations that the BOJ would curb bond market volatility and that has not happened," said Chris Walker, currency strategist at Barclays. "The yen has reacted but we are fairly neutral about dollar/yen in the short term given there is so much volatility." One-month dollar/yen implied volatility traded near its highest in more than a year at around 14.50 percent, with the spot price dropping from a high of 103.74 yen on May 22 to a low of 94.975 yen last week. "I think foreign investors expected some kind of policy response to higher JGB yields, even though domestic investors weren't betting on much," said Kyosuke Suzuki, director of FX at Societe Generale in Tokyo. "When Kuroda moves, he moves boldly ... he doesn't make tweaks as he goes along. The 10-year bond yields haven't held above 1 percent yet and, until they do, I think the BOJ are unlikely to change policy," Suzuki added. The euro was flat on the day at $1.3265, with gains checked by a rise in peripheral bond yields. Investors are nervous that Bundesbank chief Jens Weidmann, who will attend the German court hearing, could reiterate his opposition to the ECB programme. Traders said that could hurt bonds from the most indebted European countries. Meanwhile, the Australian dollar hit its lowest since September 2010, $0.9338, after Goldman Sachs joined a growing number of analysts who have downgraded the currency. 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