* Yen rises broadly as Japan yet to make decisive comment
* Stop losses in euro hit around 107 yen
* Noda declines comment on currency intervention
(updates prices)
By Anirban Nag
LONDON, Aug 24 (Reuters) - The yen struck a 15-year high
against the dollar and a nine-year peak against the euro on
Tuesday as investors and speculators tested the resolve of
Japanese authorities to stem the yen's steady rise.
The yen rise accelerated as stop-loss sales were triggered
in euro/yen at around 107 yen while traders cited macro
hedge-fund selling of the euro against the dollar.
Falls in shares helped buoy the yen on the crosses while
narrowing differentials between U.S. Treasuries and Japanese
government bond yields dragged the dollar down against the yen.
Japanese Finance Minister Yoshihiko Noda declined to comment
on the chance of currency intervention, saying only that recent
currency moves were one-sided and disorderly moves could harm
the stability of the economy and financial system. []
Traders took those comments as a sign the authorities were
not yet ready to act to curb yen strength.
"Unless the Japanese step in with something more definitive,
we will see speculative accounts drive the dollar/yen down to 80
yen," said Paul Robson, RBS Global Banking currency strategist.
"The 85 yen level was pretty important and now with that
gone, dollar/yen falling to 80 is a real possibility. That will
hurt the Japanese economy pretty hard, unless they do something
more on the fiscal side or resort to more quantitative easing."
The greenback struck a 15-year low of 84.15 yen on EBS,
before inching up to 84.26 yen by 1123 GMT, still 1 percent
lower on the day.
"The market knows full well that the options in front of the
Japanese authorities are pretty limited," said Neil Mellor,
currency strategist at Bank of New York Mellon.
"Any intervention will have limited shelf life, so now the
Bank of Japan has to formulate policies which can undermine the
yen's strength. This will not be easy and we could still be
headed towards the 105 yen mark for euro/yen."
The euro fell to 106.11 yen <EURJPY=R>, its lowest since
November 2001, having dropped past support at around 107.27 yen,
the low hit in June. It was last at 106.37 yen, down 1.2 percent
on the day.
Technical analysts say the euro could be poised for a fall
towards 105.00 yen, with interim support seen at 105.50 yen,
around the low reached in September 2001. The 105.00 yen level,
where Japanese authorities were reported to have intervened in
November 1999, was also seen providing support.
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PDF on yen strength: http://r.reuters.com/vaz26n
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The euro <EUR=> also fell to a six-week low against the
dollar of $1.2602, opening the way to a fall towards $1.2522 and
then $1.2479, daily lows from July.
JAPANESE AUTHORITIES
Traders said the chances Japanese authorities would take
fresh measures in the coming weeks to stem the yen's rise had
increased, particularly as the dollar approaches 80 yen.
Sources said the yen's surge on Tuesday had somewhat
increased the previously negligible chances the Bank of Japan
will ease monetary policy before its rate review next month.
[]
Prime Minister Naoto Kan and Bank of Japan Governor Masaaki
Shirakawa discussed the yen by phone on Monday, but Kan did not
ask the central bank to ease monetary policy further, and the
two did not touch on currency intervention. []
"Japanese policymakers will be desperate to prevent a break
in dollar/yen down to 80 but that looks the trend," Chris
Turner, head of fx strategy at ING, said in a note.
(Additional reporting by Jessica Mortimer)
