* Yen falls vs Aussie; BOJ vows easy monetary conditions
* Euro loses balance, eyes downside as Europe starts
* Commodity prices, rate views support AUD, CAD
By Kaori Kaneko
TOKYO, April 7 (Reuters) - The yen gave up some ground on
Wednesday as the Australian dollar pushed to a fresh 18-month
high, while the euro began to lose its footing again as Greek
debt worries kept it under pressure.
The yen fell to its lowest since September 2008 on the
Aussie, nearing a key Fibonacci level at 87.70 yen <AUDJPY=R>,
while dollar buying down near 93.50 yen <JPY=> saw the Japanese
currency reverse early gains and fall against the greenback.
Traders said foreign and Japanese players had picked up
dollar/yen and yen crosses, with one dealer reporting U.S. dollar
buying by a large Japanese bank, but the greenback had retreated
from its high of the day as the Asian session neared its end.
The dollar has recovered about 11 percent of its value since
hitting a 14-year low of 84.82 yen last November and has broken up
through some significant chart resistance levels.
"In the long term view, the yen is likely to remain on a
downward trend," said a trader at a Japanese bank.
"But the yen won't weaken beyond 95 yen per dollar that
easily."
The dollar rose 0.3 percent to 94.05 yen <JPY=>, with talk of
options barriers around 95.00 yen.
It has not traded above 95 yen since August but rising
short-term dollar rates and Treasury yields have boosted it as
U.S. data has signalled economic improvement. Expectations that
the Federal Reserve will easily beat the Bank of Japan to the
punch on raising interest rates have also supported it.
The Bank of Japan said after a policy meeting that the
economy was continuing to pick up, but analysts say prolonged
deflation is likely to keep the government pressing it for even
more monetary easing. []
FLOW DAY
The Aussie topped 87.50 yen, <AUDJPY=R> after breaching its
200-week moving average at 87.06 yen, but pulled back later after
nearing resistance at 87.70, which is a 61.8 percent retracement
of its fall in 2007 from above 107.80 to 55.11 in late 2008.
Traders say there was also some talk of buying related to
Sumitomo Chemical's <4005.T> deal of about A$660 million agreed
in December to take a 20 percent stake in Australia's Nufarm
<NUF.AX>. The deal completes on April 9.
The Aussie held close to an 11-week high of $0.9288 <AUD=D4>
set on Tuesday, supported by expectations of more rate hikes
after the Reserve Bank of Australia on Tuesday raised its cash
rate to 4.25 percent and flagged more hikes in coming months.
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Insider Australian dollar comment http://link.reuters.com/rub76j
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The dollar index <.DXY> <=USD> rose 0.2 percent to 81.533,
while the euro <EUR=> fell 0.3 percent to $1.3365, with support
expected at its March low of $1.3267.
Traders said sentiment towards the single currency was
bearish with many macro funds selling the euro at every uptick,
although buying interest was expected at $1.3350.
It has come under renewed pressure this week after media
reported Greece wanted to renegotiate a joint EU-International
Monetary Fund aid deal reached last month. []
Greece denied the report but on Tuesday the yield spread
between 10-year Greek and German government bonds at one point
exceeded 4 percentage points, the widest since the euro's launch.
"With Greek spreads to Bunds having blown out, the euro is
going to be struggling to sustain gains, said Sue Trinh, senior
currency strategist at Royal Bank of Canada in Hong Kong.
The euro was flat at 125.75 yen <EURJPY=R>, having lost over
1.2 percent on Tuesday.
Greece also needs to sell more bonds to meet its funding
needs.
"Greece's funding position appears more precarious given
reports about tepid investor interest in upcoming deals and
reports that the Greek government is uncomfortable with the terms
of the EU/IMF facility," JP Morgan said in a report.
The Canadian dollar <CAD=D4> held at C$0.9995 per U.S.
dollar, after striking parity the day before for the first time
since mid-2008 as rising commodity prices boosted prospects of
higher Canadian rates. For more, see []
(Additional reporting by Anirban Nag in Sydney, Satomi Noguchi
and Charlotte Cooper in Tokyo; Editing by Joseph Radford)
