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IMM currency futures end mixed, yen near lows

CHICAGO: IMM currency futures ended mostly weaker, with March yen sagging under the weight of weak Japanese stocks and concern that the Bank of Japan will intervene further to stem the rise of the yen.

March yen broke out of an afternoon trading range near the end of pit trade to set a fresh session low at $0.009566, its lowest level since November 22. The contract spent the entire day in negative territory, pressured by moderate fund selling, one IMM currency futures trader said.

Nearby yen breached support at $0.009615 in its decline, with support at the November 19 low of $0.009555 remaining intact.

The currency trader said the yen moved in tandem with Japan's beleaguered Nikkei 225 stock index.

"That's basically the reason the yen is weaker against the dollar," he said.

Concern over whether the Bank of Japan would intervene again to control the yen's movement, as it did earlier in the week, also weighed on both sentiment and the currency itself. Comments from senior Finance Ministry official Haruhiko Kuroda fuelled those jitters, as Kuroda said intervention was not always conducted only for the purpose of smoothing out market movements.

"This is important because it really does give the market a sense they care about levels," said Lisa Finstrom, senior currency analyst at Salomon Smith Barney. "They may not have specific targets, but indeed their actions were likely to weaken the currency. Although that might seem obvious, there was some debate."

March euro ended weaker, unable to hang on to its opening gains. The contract came under pressure from recovering US equities, traders said.

Nearby euros slipped below support at $1.03370, Wednesday's low, and hit a session low of $1.03260. Sellers were active after the contract sank below $1.03510, Wednesday's pit session low, another IMM currency futures trader said.

Traders await Friday's US December employment data. Average hourly earnings are forecast to rise 0.3 percent with nonfarm payrolls forecast to rise 224,000.

At settlement, March yen was $0.000105 lower at $0.009578, euros were down $0.00200 at $1.03490, Swiss francs down $0.0010 to $0.6472, sterling was up $0.0056 at $1.6476, Canadian dollar down $0.0052 to $0.6864, Australian dollars down $0.0027 to $0.6557 and Mexican pesos down $0.000375 to $0.102225. -Reuters