FOREX-Yen hovers near 15-year high vs dollar; euro slips

* Mixed messages from Japanese officials on intervention

* Euro stays under pressure on sovereign debt concerns

* Aussie dollar hits 4-month high on solid jobs data
(Adds quote, updates prices, changes byline)

By Wanfeng Zhou

NEW YORK, Sept 9 (BestGrowthStock) – The yen hovered near a 15-year
high against the dollar on Thursday as conflicting messages
from policymakers led investors to bet Japanese authorities
were not ready to intervene to weaken their currency.

The euro fell (Read more about the trembling euro. ) against the dollar and yen as concerns about
the health of the European banking sector and sovereign debt
issues persisted.

Japanese Finance Minister Yoshihiko Noda said his ministry
was conducting simulations on forex intervention. But his
comments were somewhat undermined after Bank of Japan Governor
Masaaki Shirakawa said he did not discuss currencies and
monetary policy at a government meeting. [ID:nTKV006408]

Analysts expect the yen to stay firm in the coming months
as uncertainties about the outlook for the United States and
global economies prompt investors to seek safety. Analysts do
not expect Japan to intervene until the dollar falls near 80
yen.

“We saw the continued differences in opinion between the
Ministry of Finance and the Bank of Japan,” said Matthew
Strauss, senior currency strategist at RBC Capital Markets in
Toronto.

Comments by the BOJ governor were “seen by the market as a
sign they’re not going to intervene in the near future,”
Strauss said. “The momentum is still favoring a stronger yen.”

In afternoon trading in New York, the dollar was down
slightly at 83.85 yen (JPY=: ). It earlier hit a session low of
83.49, according to electronic trading platform EBS, within
sight of the 15-year low of 83.34 yen hit on EBS on Wednesday.

Options traders said there was good demand for yen calls in
the 1-month to 2-month bracket, but yen puts were more popular
in shorter dates, suggesting investors are hedging their bets
about possible intervention.

Traders expect the yen to weaken if Japanese authorities
intervene, though longer term investors point to the failure of
recent Swiss national bank intervention to stifle the franc’s
strength.

“Markets try always to move to what we have called ‘the
obscene number’ before turning around, and given that the
all-time high for the yen is just below 80, it seems reasonable
to assume that we shall at least visit that level before
turning in the other direction,” said analyst Dennis Gartman.

EURO ZONE WORRIES

The euro was last down 0.2 percent at $1.2696 (EUR=: ).
Against the yen, the euro fell (Read more about the trembling euro. ) 0.2 percent to 106.50, after
hitting a session low of 105.98 yen (EURJPY=: ), moving closer to
a nine-year low of 105.41 yen hit in late August.

The euro’s weakness came despite a slight increase in risk
appetite, which got a boost after better-than-expected U.S.
data on the U.S. jobs market and trade activity raised hopes
the economic recovery would accelerate. [ID:nN09174403]

“The dollar is holding its own, especially against the
euro, more as a result of the continued concerns in Europe
regarding the sovereign debt issues,” RBC’s Strauss said.

Traders said the euro came under pressure after failing to
convincingly break resistance at $1.2760.

“Confidence is evaporating in the euro zone banking system,
particularly for Portugal, Ireland and Greece, and supporting
the system will require government debt to rise to
unsustainable levels. That is what the market is concerned
about,” said Lee Hardman, currency economist at Bank of
Tokyo-Mitsubishi UFJ in London.

The Australian dollar extended gains as a barrier was taken
out at $0.9250, hitting a four-month high on strong jobs data
and rising speculation of a rate rise. The Aussie dollar was
last up 0.5 percent at 0.9235 (AUD=: ).
(Additional reporting by Nick Olivari; Editing by Padraic
Cassidy)

FOREX-Yen hovers near 15-year high vs dollar; euro slips