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IMM currencies mostly higher, June yen falters

CHICAGO: IMM currency futures finished mixed Wednesday following a quiet, range-bound session after the Bank of Japan intervened in the spot market and bought dollars with yen overnight.

The June yen gapped lower on GLOBEX after the BOJ took action to stem the recent rapid appreciation of the yen.

However, traders said the setback in the currency was likely temporary.

"We are pretty upbeat on the yen," said a currency analyst at a New York dealer.

The analyst suggested that Japan's unchanged monetary policy and loose fiscal policy continue to support further appreciation.

"Until maybe they adopt some quantitative easing or an inflationary target or a target for money supply, the yen should remain supported," the analyst added.

Technicians pegged support at $0.009422 in the June yen and looked for demand to surface on signs of weakness.

The June euro started the day off at lower levels due to weaker-than-expected German manufacturing data.

Industrial orders for the month fell 0.4 percent against expectations of a 1.3 percent rise.

However, traders said the euro recovered as US equities headed lower in midmorning trade. The rally picked up momentum and shortcovering fuelled additional gains.

Traders said the currency was overdue for a corrective rally after dropping to new contract lows of $0.95880 following the data.

"Market sentiment is so negative on the euro. That combined with the unwinding of the euro/yen cross trades should continue to pressure the euro," a trader said.

Traders are looking for the downtrend to resume with next support seen at $0.95800. They did not expect prices to penetrate resistance at $0.97750.

June sterling also managed a higher close in front of the conclusion of the two-day Bank of England meeting Thursday.

Analysts expect no policy changes.

At settlement, June yen was $0.000084 lower at $0.009504, euros up $0.00400 at $0.96790, Swiss francs up $0.0025 at $0.6044, sterling up $0.0032 at $1.5810, Canadian dollars off $0.0014 at $0.6880, Australian dollars up $0.0060 at $0.6102 and Mexican pesos up $0.000050 at $0.104975.-Reuters