Reply #4: Yen Strengthens on Speculation BOJ Won't Act to Stem Advance

[UpInArms]

http://www.bloomberg.com/apps/news?pid=10000087&sid=apbpeWuBYeNg&refer=top_world_news

Jan. 3 (Bloomberg) -- The yen rose against the euro and traded near a four-week high against the dollar on speculation the Bank of Japan won't try to halt its currency's gains.

The BOJ stayed out of the foreign exchange market in the month to Dec. 28, a period when the yen reached 101.83 per dollar on Dec. 2, the strongest since January 2000, a report last week showed. The dollar ended 2004 down 4.3 percent against the yen, partly on speculation the Bush administration favors a weaker currency.

``There's still room for yen appreciation,'' said Claudio Piron, a currency strategist in Singapore at JPMorgan Chase & Co. ``There's unlikely to be intervention by the BOJ until we get below 100'' yen per dollar.

The yen traded at 102.45 per dollar at 11:22 a.m. in Tokyo, from 102.63 late in New York on Dec. 31, according to electronic foreign-exchange trading system EBS. It also rose to 138.62 per euro, from 139.10.

JPMorgan expects the yen to rise to 96 per dollar by the end of March, Piron said.

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``The bottom line is it's going to take action to turn the dollar's fortunes around,'' said Callum Henderson, global head of foreign exchange in Singapore at Standard Chartered Plc. ``The ECB isn't ready to intervene and it appears we haven't hit the trigger that would cause the BOJ to act on the yen.''

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