FOREX-Dlr/yen slips towards 15-yr low, Aussie jumps

* Dollar/yen near 15-year low, seen vulnerable

* Aussie hits 4-month high on solid jobs data

* Threat of immediate Japan intervention seen tapering off

By Hideyuki Sano

TOKYO, Sept 9 (BestGrowthStock) – The dollar neared a 15-year low
against the yen on Thursday as traders bet that Japanese
authorities are not yet ready to intervene, while the Australian
dollar hit a four-month high on solid Australian jobs data.

The rise in the Aussie failed to give its usual fillip to the
U.S. dollar against the yen, via trade in the yen crosses,
reinforcing bearish views on dollar/yen.

Traders said there had been speculation that Japanese
intervention might be imminent after talk swirled in the market
late on Wednesday that Japanese authorities had checked rates,
prompting short-term players to go long on the dollar.

But wariness about intervention is tapering off as nothing
has happened up to now, and those who bought the dollar might be
unwinding their positions, traders said.

Japanese Finance Minister Yoshihiko Noda said on Thursday the
ministry was conducting simulations on forex intervention, in a
possible reference to rate checks, but the yen hardly budged as
the perception remains that Japan is unlikely to intervene until
the dollar falls near 80 yen.

The dollar slipped 0.3 percent on the day to 83.60 yen
(JPY=: ), closing in on a 15-year low of 83.34 yen struck on
trading platform EBS on Wednesday.

WILL THEY, WON’T THEY?

Wariness about intervention lifted the dollar briefly in
early trade but it failed to sustain a rise above 84 yen, its
five-day moving average.

“The U.S. dollar really seems under pressure. There’s fear of
a ‘Japanisation’ of the U.S. economy, where growth would stagnate
and interest rates fall,” said Koichi Yoshikawa, head of FX
trading at BNP Paribas.

Shrinking yield gaps between Japan and the U.S. have been a
major driver behind the dollar’s fall versus the yen since May,
as the prospect of continuing low U.S. interest rates has
extended and investors wary of risk have moved into bonds.

Japanese investors bought a net 731 billion yen ($8.72
billion) of foreign bonds last week, the 17th week in a row of net
overseas bond buying. Traders are watching for signs of fund
repatriation into yen ahead of half-year book-closing on Sept.
30.

Some market players are now looking to the Japanese ruling
party’s leadership vote next Tuesday, with Prime Minister Naoto
Kan holding only a slim lead over rival Ichiro Ozawa, seen by
markets as likely to pursue more reflationist policies.

If Ozawa wins the vote and becomes prime minister, some
players say there is likely to be a knee-jerk fall in the yen.

The greenback seems to have support at the lower end of its
Bollinger Band around 83.35, said Teppei Ino, analyst at Bank of
Tokyo-Mitsubishi UFJ, noting it rebounded from there on
Wednesday.

Many traders think it is only a matter of time, however,
before the dollar falls below that level, with talk of options
barriers at 83.00 and then 82.50.

The dollar index (Read more about the global trade. ) (.DXY: ) has repeatedly failed to break above
its 55-day moving average, making the case for more weakness in
the currency.

DIVERGENCE?

The Australian dollar jumped to a four-month high of $0.9237
(AUD=D4: ) after strong jobs data, breaking above $0.92 resistance.

The data boosted expectations of another Australian rate
rise, with overnight interest rate swaps pricing in one more rate
hike within a year. (AUDOIS: )

The Aussie also hit a record high against the euro beyond
A$1.3800 per euro (EURAUD=R: ) but it made little progress against
the yen as yen bulls used the cross instead of dollar/yen to bet
on further gains in the Japanese currency.

The Canadian dollar kept Wednesday’s hefty gains at C$1.0380
per dollar (CAD=D4: ) following a rate hike by the central bank.

“The direction of monetary policy is completely the opposite
between the United States and countries like Australia and
Canada. So currencies like the Aussie and the Canadian dollar
will tend to be favoured,” said BNP Paribas’ Yoshikawa.

The euro vacillated at $1.2700 (EUR=: ), after rising about 0.3
percent on Wednesday as a successful Portuguese debt
auction helped soothe fears about government funding in Europe.

Traders said comments by European Central Bank executive
board member Juergen Stark to German lawmakers that German banks
are undercapitalised helped tip it lower. [ID:nBAT005656]

Later on Thursday, the Bank of England will hold a monetary
policy meeting, where it is expected to keep rates at 0.5 percent
and refrain from increasing its asset purchase programme.

The pound traded at $1.5450 (GBP=D4: ), off a 1-