FOREX-Dollar firm as yields support, off 15-yr low vs yen

* Dollar firmer across board, higher U.S. yields help

* Yen in retreat from 15-year peak on dollar

By Hideyuki Sano

TOKYO, Sept 10 (BestGrowthStock) – The dollar rose against major
currencies on Friday, staging a small rebound against the yen and
the Swiss franc following a rise in U.S. bond yields, while the
yen slipped against commodity currencies.

Chinese trade data showed higher-than-expected imports for
August, supporting commodity-linked currencies such as the
Australian dollar against the low-yielding yen, which is often
used to fund carry trades into higher-yielding currencies.

The dollar edged further off this week’s 15-year low against
the yen, helped by a rise in U.S. Treasury yields the previous
day and a widening in the U.S.-Japan yield spread, but it
struggled to clear resistance around 84.30 yen. (JPY=: )

“U.S. bond yields have risen near their highest levels since
last week’s payroll data. I think the impact of the rise in U.S.
yields is driving the yen down,” said Katsunori Kitakura, chief
dealer at Chuo Mitsui Banking Corp.

The dollar rose 0.1 percent to 83.90 yen (JPY=: ), fading back
through 84.00 after briefly topping its five-day moving average
of 84.27 yen for the first time in a week and its tenkan line on
the daily Ichimoku chart at 84.29.

“The next target will be its high of 85.23 yen hit after the
payroll data,” Kitakura said.

Others expect strong resistance at 85 yen and above after the
greenback failed to maintain gains at that level a week ago
following stronger-than-expected U.S. payroll data.

Japanese exporters are said to want to sell the dollar around
that level ahead of half-year book closings at the month-end.

The dollar hit a 15-year low of 83.34 yen this week,
intensifying speculation that Japanese authorities might step in
to curb yen gains if the move accelerates towards 80 yen.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ PDF presentation on the yen: TAKE-A-LOOK on Japan politics [nPOLJP] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Attention is also turning to a ruling party leadership race
on Sept. 14 in which Prime Minister Naoto Kan faces a challenge
from powerbroker Ichiro Ozawa, with Kan having a slight edge
although the outcome is seen as too close to call.

A Reuters poll shows that a win by Ozawa in the vote, which
would also decide who is prime minister, would likely give a
short-term boost to stocks but weaken Japanese government bonds
and the yen. [ID:nTWKAKE617]

Ozawa has said Japan should intervene to weaken the yen, and
while some analysts say intervention would be difficult without
support from Washington, others say that Tokyo under Ozawa would
be more likely to take action if the yen strengthens.

“So the chances of intervention will rise as compared to the
period under Kan,” said Masafumi Yamamoto, chief FX strategist
Japan at Barclays Capital.

The dollar edged up against a basket of currencies (.DXY: )
(=USD: ), although it failed to hold above the index’s 55-day
moving average at 82.80.

It initially rose against the Swiss franc before giving back
gains to stand flat on the day at 1.0150 francs (CHF=: ), though it
was still above this week’s nine-month low of 1.0060 francs.

The Australian dollar made no headway against the greenback
although it held near a four-month high at $0.9278 set on
Thursday after strong Australian jobs data.

It slipped 0.1 percent to $0.9228 (AUD=D4: ).

It held its ground against the yen at 77.42 yen (AUDJPY=R: )
but failed to keep gains made immediately after trade data out of
China showed imports up an annual 35.2 percent in August, boding
well for domestic demand and trading partners including
Australia. [ID:nTOE689024]

The euro slid 0.1 percent to $1.2686 (EUR=: ), with support
expected at its 100-day moving average at $1.2657. It eased
slightly to 106.40 yen.
(Additional reporting by Reuters FX analyst Rick Lloyd in
Singapore, Wayne Cole in Sydney and Charlotte Cooper in Tokyo;
Editing by Michael Watson)

FOREX-Dollar firm as yields support, off 15-yr low vs yen