FOREX-Yen cautious ahead of BOJ outcome, Aussie eyes inflation

Tue Jan 21, 2014 6:00pm EST
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* Yen softer against dollar and euro

* BOJ seen maintaining massive stimulus, no new measures expected

* Aussie dollar awaits consumer inflation data

By Ian Chua

SYDNEY, Jan 22 (Reuters) - The yen was on the back foot early on Wednesday with investors unwilling to take aggressive bets ahead of the outcome of the Bank of Japan (BOJ) policy meeting.

The BOJ is widely expected to maintain a wait-and-see stance having embarked on a massive stimulus program last year. It prefers not to ease again unless clear evidence emerges that a sales tax hike in April causes far more damage than expected.

The dollar bought 104.28 yen after hitting a one-week high of 104.75, while the euro fetched 141.40 yen off a six-week trough of 140.33.

Against the greenback, the euro currency was trading at $1.3558 after a directionless session that saw it hemmed in the previous day's range of $1.3508/3569.

"Numerous markets and FX pairs attempted but failed to break ranges, leaving a muddy near-term outlook for the Asian morning," said Sean Callow, strategist at Westpac Bank in Sydney.   Continued...