* Dollar/yen rises as high as 94.78 on EBS before easing
* US service sector, housing activity better than forecast
* Markets closely watch moves in Chinese yuan
(Updates prices, adds comment, details)
By Wanfeng Zhou
NEW YORK, April 5 (Reuters) - The U.S. dollar slipped
against the yen on Monday as traders booked profits after the
greenback rallied to a more than seven-month high earlier in
the day.
Overall trading in the foreign-exchange market was subdued
with markets in the UK and most euro zone countries closed for
a holiday.
The dollar earlier rose to its highest level against the
yen since late August 2009, near 95 yen, after Friday's solid
U.S. jobs data boosted optimism about the economic recovery and
lifted Treasury yields, enhancing the greenback's appeal
relative to the low-yielding yen.
"The U.S. dollar is a little bit softer as the market tries
to absorb the impact of the pretty good U.S. labor report
released on Friday," said Amarjit Sahota, chief currency
strategist at HiFX in San Francisco.
"Today the market is just really consolidating and waiting
for Europe to come back into full action. I'm not reading too
much into any of today's moves," he added.
In midday New York trading, the dollar was down 0.2 percent
at 94.40 yen <JPY=>. It earlier rose as high as 94.78 yen on
electronic trading platform EBS.
Traders said the dollar is likely to find new resistance
around 95.10 yen -- which would be 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.
"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."
Currency speculators increased their bets on the dollar and
turned short yen in the latest week, data from the Commodity
Futures Trading Commission showed on Friday. A short position
is a bet that prices will fall. []
"From modestly net long JPY, the market has shifted to
decidedly net short JPY, and to levels last seen in October
2007," RBC Capital Markets wrote in a note.
DISCOUNT RATE, CHINESE YUAN
Against the euro, the dollar edged higher on Monday. The
euro last traded 0.1 percent lower at $1.3484 <EUR=>.
A jump in private-sector hiring in Friday's jobs report led
traders to guess the Federal Reserve Board of Governors may
raise the discount rate at its meeting on Monday, providing
support to the dollar. []
Many analysts, however, downplayed the significance of the
upcoming Fed board meeting since it is held every other Monday
to consider the petitions of the 12 regional Fed banks for
changing or maintaining their discount rates. It is not closely
watched like meetings of the U.S. central bank's policy-setting
Federal Open Market Committee.
The dollar also got a lift after data showed the U.S.
services sector grew in March at its fastest pace in nearly
four years, while pending home sales unexpectedly rose in
February.
The data from the Institute of Supply Management on the
services sector "is another clear signal that the recovery is
reaching self sustaining momentum," said Alan Ruskin, head of
currency strategy RBS Global Banking & Markets, in Stamford,
Connecticut.
Market players said they were also watching moves in the
Chinese yuan after U.S. Treasury Secretary Timothy Geithner
said on Saturday that he will delay an April 15 report on
whether China manipulates its currency. The decision came ahead
of a visit by Chinese President Hu Jintao to Washington for a
nuclear security summit next week. []
There was a slight increase in market expectations for the
currency to appreciate in yuan non-deliverable forwards
<CNYNDFOR=>. One-year NDFs moved from 6.645 per dollar to
around 6.6200, which implied an appreciation of about 3.1
percent in a year's time.
(Editing by Leslie Adler)
