FOREX-Yen near 15-yr high vs dollar, Japan mixed messages

* The yen remains near 15-year high vs dollar

* Euro in sight of 9-yr low against the yen

* Aussie hits 4-month high on solid jobs data

(Recasts, adds quote, updates prices)

By Nick Olivari

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

The dollar briefly pared losses against the yen after U.S.
initial weekly jobless claims fell to their lowest level in two
months and a separate report showed the U.S. international
trade deficit narrowed more than expected in July.
[ID:nN09173765] and [ID:nN08114427].

But while both reports eased concerns about the pace of the
U.S. economic recovery, the main focus lay on Japan and to a
lesser extent problems in the euro zone banking system.

Japanese Finance Minister Yoshihiko Noda said on Thursday
his ministry was conducting simulations on forex intervention,
but the yen hardly budged as the market still thinks Japan is
unlikely to intervene until the dollar falls near 80 yen.

Noda’s comments were also somewhat undermined after Bank of
Japan Governor Masaaki Shirakawa said he did not discuss
currencies and monetary policy at a government meeting.
[ID:nTKV006408]

Traders expect the yen to weaken if japanese authorities
intervene though longer term investors point to the failure of
a 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,
from the Gartman Letter.

Midway through the New York session, the dollar had fallen
0.1 percent to 83.75 yen (JPY=: ), within sight of the 15-year
low of 83.34 yen hit on trading platform EBS (JPY=EBS: ) on
Wednesday. The low using Reuters data was 83.32 yen.

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

The euro is near a nine-year low against the yen hit in
late August. The low on Reuters data was 105.41 yen (EURJPY=: )
and on EBS 105.44 (EURJPY=EBS: ). It was last down 0.1 percent at
106.55 yen (EURJPY=: ).

DOWNWARD BIAS FOR EURO

The euro briefly rose after the U.S. data on a rise in risk
tolerance but gains remained capped by continued concerns about
the fragile euro zone banking system.

While the session peak was $1.2767, there was no sustained
break of resistance at $1.2760 and the euro fell (Read more about the trembling euro. ) back in
technical trading, analysts said. The global session low was
$1.2665 but intraday support in New York was now around
$1.2710, analysts said.

The euro was last little changed against the dollar at
$1.2722 (EUR=: ),

Euro trading on Thursday followed losses on Wednesday after
European Central Bank Executive Board member Juergen Stark told
German lawmakers that German banks were undercapitalized,
according to a participant. [ID:nBAT005656]

“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 Australian dollar was last up 0.8 percent at 0.9256
(AUD=: ).
(Additional reporting by Neal Armstrong in London)
(Reporting by Nick Olivari; Editing by Andrew Hay)

FOREX-Yen near 15-yr high vs dollar, Japan mixed messages