* Dollar/yen rises as high as Y94.78 on EBS, then eases
* Traders take profits from dollar gains
* Traders eye reopening of NY stock market, Fed board meeting
By Satomi Noguchi
TOKYO, April 5 (Reuters) - The dollar eased against the yen
on Monday with traders pocketing profits after the greenback
vaulted to its highest in more than seven months earlier in the
day.
In holiday-thinned early Asian trade, the dollar rose to near
the 95 yen mark, adding to a 2.8 percent climb last week, after
generally upbeat jobs data indicated the U.S. economic recovery
is on a solid footing.
But traders said speculators trimmed yen shorts after having
turned their positions against the yen aggressively, providing a
floor for the Japanese currency which had earlier hit a nine-week
low against sterling and an 18-month trough versus the Australian
dollar.
Still, overall trading remained subdued with markets in
Australia, New Zealand and China closed for holidays.
"After breaking decisively above the January high of 93.78
yen and other strong chart resistance, technically dollar/yen is
clearly in a bullish trend," said Minoru Shioiri, chief manager
of foreign exchange trading at Mitsubishi UFJ Securities.
"But for many players the dollar looks too high to bet more
on the currency, unless you are a medium-term trader expecting it
to rise to 100 yen," he said.
The dollar earlier rose as high as 94.78 yen on trading
platform EBS, the highest since late August 2009, before easing
to 94.38 yen, down about 0.2 percent from midday trading in New
York on Friday.
Analysts said the dollar is likely to find new resistance
around 95.10 yen -- a 61.8 percent retracement of its fall from a
high in April 2009 of 101.45 to a 14-year low of 84.82 yen hit in
late November.
Traders said rises in long-term Treasury yields after the
jobs report, with the benchmark 10-year yield <US10YT=RR>
climbing to a nearly 10-month high just below 4 percent, also
boosted the dollar's yield appeal compared with the low-yielding
yen.[]
A solid rise in private-sector hiring in the jobs report has
led traders to believe the Federal Reserve may raise the discount
rate again on Monday when it holds a meeting, providing support
to the dollar. []
Many analysts downplayed the significance of the upcoming Fed
board meeting since it is held every other Monday and is not the
closely watched Federal Open Market Committee (FOMC) meeting. But
it stirred chatter of another increase in the discount rate, or
the emergency rate at which it lends to banks.
On Feb. 18, the Fed surprised the market when it hiked the
discount rate by a quarter point to 0.75 percent.
Markets in the UK and many euro zone countries are also on
holiday.
The U.S. stock market will reopen after closing on Friday for
the Good Friday holiday.
"The dollar looks already high enough against the yen to take
profits," said a senior trader at a Japanese bank.
"But the currency's strength since Friday without a major
corrective move down suggests that it may stay on a firm footing
at least until the market sees the result of the Fed meeting
today," the trader said.
The dollar index, a gauge of the greenback's performance
against six other major currencies, stood at 81.133 <.DXY>, off
Friday's high of 81.324 when it rose about 0.8 percent.
In the week to March 30, speculators increased their bets on
the dollar with the value of the dollar's net long position
totalling $12.28 billion, compared with a net long of $4.08
billion the week before, Commodity Futures Trading Commission
data showed on Friday. []
The euro was trading around $1.3499 <EUR=> from $1.3476 in
midday trading hours in U.S. on Friday when it fell about 0.7
percent.
The euro was at 127.54 yen <EURJPY=R> after it rose
as high as 127.93 yen earlier on EBS, around a 10-week high.
The Australian dollar advanced as far as around 87.10 yen,
according to Reuters data, the highest since late September 2008,
before retreating to 86.91 yen.
KEEPING EYE ON CHINESE YUAN
U.S. Treasury Secretary Timothy Geithner said on Saturday
that he was delaying an April 15 report on whether China
manipulates its currency, ahead of a visit by Chinese President
Hu Jintao to Washington for a nuclear security summit next week.
[]
Market players said they were watching how the yuan could be
affected.
"The U.S. decision not to point a finger at China should be
taken as Washington's way to prompt China to voluntarily raise
the value of the yuan," said Yasutoshi Nagai, chief economist at
Daiwa Securities Capital Markets.
"In fact, China may be looking for the right time to do so,
as boosting its currency would be a smooth solution to fixing
problems such as inflationary pressure," he said.
(Additional reporting by Rika Otsuka and Kaori Kaneko; Editing
by Chris Gallagher)
