Dollar Fall Versus Yen on Poor JGBs Auction Result

 
   By Tatsuo Ito 
 

        TOKYO--The dollar fell against the yen Friday in Asia, as a weaker-than-expected outcome to a government bond auction made traders jittery and raised doubts about the Bank of Japan's future policy.
        "The poor five-year bond auction results have raised speculation that the BOJ may be finding it difficult to take further easing steps," said Takahiro Iizuka, trader at Mizuho Trust and Banking Co.
        Such views come on the heel of reports Thursday, citing people familiar with the BOJ's thinking, as saying that some officials were viewing further easing as counterproductive for the economy.
        As of 0450GMT, the pair was at Y118.50 compared with around Y119 before the auction results. It was around Y118.93 in late New York Thursday. The benchmark 10-year Japanese bond yield rose as high as 0.435% after the auction.
        The euro was at $1.1427 versus $1.1407.
        The JGB market has been volatile in recent weeks amid uncertainty over the course of the monetary policy, with the yield rising recently after falling as much as 0.195% in late January.
        "The currency market turned a risk-off mode after the auction," said Yuji Saito, executive director of foreign exchange at Crédit Agricole Corporate & Investment Bank. The yen, perceived as safe haven currency, tends to be bought when investors sentiment becomes cautious.
        Mr. Saito said the dollar could continue to be roughly in a "Y115-Y120" range next week, as the number of market participants is expected to decrease due to the lunar new year holidays in many Asian countries.
        Traders are also focused on BOJ's Gov. Haruhiko Kuroda's remarks on the yen after a two-day policy-setting meeting that will end Wednesday.
        While many traders expect there would be no major change to the key policy, they are focused on what Mr. Kuroda will say about the recent yen falls and the effects on monetary policy.
        Meanwhile, Simon Pianfetti, assistant manager at SMBC Trust Bank in Tokyo, said he expects the dollar to move in a Y118.50-Y120.50 range next week with a close eye on U.S. economic data.
        "I would continue to monitor the situation between Greece and the E.U., but I think U.S. macro data would have a bigger impact on the pair," he said. Among U.S. data that require close attention are initial jobless claims and the Empire State Manufacturing index, he added.
        Write to Tatsuo Ito at tatsuo.ito@wsj.com
        (END) Dow Jones Newswires

        February 13, 2015 00:29 ET (05:29 GMT)

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