* Japan PM to brief media Friday on yen steps-Kyodo
* Japan exporters seen waiting to sell dollar on rallies
* Wariness about possible Japan steps may limit yen rise
* Traders await Bernanke's speech at Fed gathering
* Yen may scale record high in 2010 despite intervent risk
By Masayuki Kitano
TOKYO, Aug 27 (Reuters) - The dollar rose against the yen on
Friday, trimming earlier losses due to wariness on possible
measures from Japanese authorities to stem the yen's rise.
Prompting these jitters was a Kyodo news agency report
saying Japanese Prime Minister Naoto Kan will hold a news
conference on Friday on the government's steps to cope with a
recent surge in the yen. []
Separately, Japanese Finance Minister Yoshihiko Noda
reiterated that the government will take appropriate action on
currencies when necessary. []
"The yen did dip a little bit, but I think market players
were already bracing for this type of news," said Yuji Matsuura,
joint general manager for Aozora Bank's forex & derivatives
trading group.
Any gains in the greenback could turn out to be limited,
with Japanese exporters likely to be waiting to sell the dollar
on any rallies, Matsuura said.
The yen may also get a lift if Kan does not unveil any
concrete steps to curb the yen's rise, Matsuura added.
The dollar was up 0.3 percent against the yen from late U.S.
trading on Thursday at 84.71 yen <JPY=>.
The greenback pulled up from an intraday low of 84.27 yen as
the media report on Kan's news conference sparked
short-squeezing in dollar/yen, a senior trader at a big Japanese
bank said.
But the pair was was still not that far away from a 15-year
low of 83.58 yen hit on trading platform EBS earlier this week.
Another focus is what Federal Reserve Chairman Ben Bernanke
may say on the U.S. economy when he speaks later on Friday at
the annual Federal Reserve conference in Jackson Hole, Wyoming.
Investors will be watching to see whether the Fed's views on
the economy have become bleaker since its policy meeting earlier
in August. []
"In addition, the market will closely watch for hints of
further expansion to the balance sheet. Jackson Hole has not
traditionally been a venue for major policy statements, but we
do not exclude this possibility," analysts at JPMorgan said in a
research note.
The Federal Reserve announced plans earlier this month to
boost a flagging economy by reinvesting money from maturing
mortgage bonds in government debt.
Market players say the Fed's pledge to maintain asset
purchases and shift to Treasuries suggests it may boost the size
of its already massive $2.3 trillion balance sheet if the
economy loses momentum.
The euro inched up 0.1 percent to $1.2728 <EUR=>. It dipped
to a six-week low of $1.2588 earlier this week, partly due to a
renewed focus on fiscal woes among some peripheral euro zone
countries.
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PDF on Japan's yen puzzle: http://r.reuters.com/nef47n
Q+A-Will Japan intervene to curb yen's rise? []
BOJ FOCUS on chance of monetary easing []
Why the yen may remain strong []
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WILL YEN HIT RECORD PEAK?
Despite the risk of possible action by Japanese authorities
to curb yen strength such as yen-selling intervention or
monetary easing by the Bank of Japan, some traders and investors
say the yen could test a record high of 79.75 yen to the dollar,
hit in April 1995, later this year.
The fate of the yen will depend on the overall trend of the
U.S. economy rather than the possibility of BOJ intervention,
Michiharu Maeda, general manager of Dai-ichi's separate account
management division told Reuters in an interview on Thursday.
"The current mood of testing a record high of 79.75 (against
the dollar) will stay in place in the near term," Maeda said.
"We believe that there is a big chance of the BOJ
intervening by itself ... but the impact could be limited as the
central bank's efforts could result in creating more chances for
the market to sell (the dollar against the yen)," Maeda said.
Many analysts think solo yen-selling intervention by
Japanese authorities would amount to little more than a drop in
the ocean, since the driving force behind the yen's rise is
mounting worry that the U.S. economy is headed for a double-dip
recession and the Federal Reserve may boost quantitative easing.
A euro zone source familiar with the situation said on
Thursday that joint central bank intervention to stem the rise
of the yen is not likely, and that it is more realistic to
expect Japan to act alone. []
(Additional reporting by Wayne Cole in Sydney; Chikafumi Hodo
and Rika Otsuka in Tokyo; Editing by Joseph Radford)
