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FOREX-Yen slips on short-term bets, economy, Citi eyed

Published 04/16/2009, 09:38 PM
Updated 04/16/2009, 09:48 PM
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* Yen falls vs dollar, Aussie, kiwi

* Short-term trading dominates making trade choppy

* Market awaiting Citi results later

By Charlotte Cooper

TOKYO, April 17 (Reuters) - The yen slipped against the dollar and other majors on Friday as short-term traders pushed it down, but uncertainty about economic recovery prospects left the market struggling for momentum as it also awaited results from Citigroup.

The yen had risen against the greenback and commodity currencies on Thursday after China's 6.1 percent economic growth rate disappointed many who had bet on a faster pace.

But it failed to maintain the gains into Friday, prompting short-term speculators to push the dollar up instead, triggering dollar buy orders at higher levels and taking the likes of the Australian and New Zealand dollar up with it.

Analysts said investors remain cautious of holding positions for very long, given uncertainty about the prospects for economic recovery in the United States and other big economies, which was reinforced by mixed U.S. data on jobless claims and housing starts on Thursday. As a result day-to-day trading was choppy.

"It is speculators and intraday trading which are running the market action," said Sue Trinh, senior currency strategist at RBC Capital Markets in Sydney.

"But if you take a step back, we are in a very wide range overall with a very modest bias towards risk appetite on a one-month timeframe."

The dollar, which has climbed gradually against the yen since hitting a 13-year low in January, rose 0.3 percent to 99.65 yen on Friday, after breaching support from its 200-day moving average at 98.88 on Thursday but then not staying below it.

"The dollar/yen temporarily went lower than that level but failed to close below it - this one reason why the yen's appreciation didn't continue," said Toru Umemoto, chief FX strategist Japan at Barclays Capital.

With trading short-term and chart-based, the Australian dollar rose 0.3 percent to 71.80 yen and edged up 0.1 percent to $0.7203 after sliding 1 percent on Thursday.

The euro firmed 0.1 percent to 131.05 yen but slipped 0.3 percent to $1.3149.

Wall Street closed higher, with better-than-expected JP Morgan results adding to hopes of bank sector stabilisation but the currency market was waiting to see earnings from Citigroup expected later in the day.

U.S. housing starts and building permits both fell in March while continued claims for jobless benefits rose to a record high in early April as the recession bit and added to the gloom..

But Federal Reserve Bank of Atlanta President Dennis Lockhart said the U.S. recession should end by mid-year, with growth slowly picking up in the following months. (Editing by Kazunori Takada)

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