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FOREX-Yen near lows, market on alert for more intervention

Published 09/15/2010, 08:03 PM
Updated 09/15/2010, 08:08 PM

* Japan exporters may tiptoe into market to sell dollar

* Market looking to comments from Treasury's Geithner

By Hideyuki Sano

TOKYO, Sept 16 (Reuters) - The yen remained under pressure on Thursday as traders stayed on the alert for possible further intervention by Japanese authorities after their massive yen-selling campaign the previous day caught many off guard.

Dealers said the Bank of Japan spent $20 billion or more worth of yen on Wednesday to weaken the currency against the greenback, which staged its biggest daily gain against the yen in almost two years.

The dollar traded at 85.63 yen, down slightly from late U.S. levels but still not far from Wednesday's high of 85.78 yen on electronic trading platform EBS, and nearly three yen above its 15-year low of 82.87 yen struck just before Tokyo stepped into the market on Wednesday.

"Looking at the dollar's surge yesterday, some Japanese exporters may want to wait a bit more before they sell the dollar," said Teppei Ino, analyst at Bank of Mitsubishi-Tokyo UFJ.

Traders have said Japanese exporters want to sell the dollar above 85 yen before their half-year book-closing at the end of September, which has been a factor behind the yen's relentless rise before the dollar rebounded from the 15-year low on intervention.

Yet the dollar's upside may be limited near its 20-day upper Bollinger Band around 85.80. Another resistance level is seen around 86.30, where the bottom of Ichimoku cloud sits on Thursday.

The market will be looking to U.S. Treasury Secretary Tim Geithner's testimony before the Senate Banking Committee at 1400 GMT as Japan's intervention could have complicated his efforts to persuade China to let the yuan appreciate.

Any criticism from Geithner on Japanese intervention could spark speculation that Japan may scale back its intervention, dealers said.

Geithner will tell lawmakers in prepared testimony that China's yuan currency has risen too slowly and he is examining what tools may be needed to persuade Beijing to move faster.

The euro traded at 111.50 yen, little changed on the day so far and near a one-month high of 111.63 yen struck on Wednesday. (Editing by Chris Gallagher)

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