By Masataka Nakamura
Tokyo, May 28 (BridgeNews) - The U.S. dollar/yen and the euro/yen closed higher Monday, helped by the buying from Japanese names and stop loss buying.
However, overall Asian Monday trading was sluggish due to the Memorial Day holiday in the United States and the spring bank holiday in the U.K. Major currencies were stuck in a tight range in low volume.

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As for dollar/yen, there was some Japanese buying interest below 120.50, but follow-through buying was lacking during the morning session, which limited the upward movement of the pair.
Later in the session, a couple of Japanese banks bought the dollar/yen to push the pair higher from 120.50 to 120.80. Dealers suspect that they bought the pair on behalf of their clients and that they just covered their positions.
Then, stop loss dollar/yen buying from 120.90-121.00 came through, pushing the pair up.
However, dealers said the movement was exaggerated by thin market, without attaching much significance to the price action for the dollar/yen.
Some dealers mentioned that increasing political uncertainty helped underpinning the dollar/yen. There was a news report that Indonesian presidential Spokesman Adhi Massardi said a state of emergency could be invoked to prevent potential civil unrest by forces for and against Wahid, the nation's first democratically chosen president. Parliament is scheduled to meet Wednesday.
Japanese Vice Finance Minister for International Affairs Haruhiko Kuroda reiterated he hopes the euro will rebound against the dollar and the yen.
He also said the ministry's view on dollar/yen is unchanged. Last Thursday when dollar/yen fell to as low as 118.80 and euro/yen to 101.04, Kuroda warned the market the ministry would intervene in the foreign exchange market if currency levels became out of line with economic fundamentals.
However, Kuroda's comment Monday failed to inspire the foreign exchange market Monday.
The Japanese stock market also saw quiet trading Monday session. Share prices ended Monday's session lower led by concerns over bad loans in the banking sector and following U.S. stock declines Friday. Trading activity was thin with investors taking a wait-and-see attitude ahead of the April preliminary industrial output data due out Tuesday.
The Nikkei 225 Stock Average fell 0.2%, or 28.15 points, to 13,737.77 after fluctuating in a narrow range of about 100 points. The movement of the Tokyo stock market also failed to have an impact on dollar/yen.
Overall, traders were not willing to set up fresh positions because of uncertainty over short term direction of the yen. Moreover, U.S. holiday discouraged trading activity to large extent. Yoji Hamada, assistant vice president of Japan-FX at Bank of America said that trading was sluggish with poor liqudiity Monday, due to the holiday in the U.S.
Euro/yen rose firmer, but the movement was largely shadowed by dollar/yen price action. Euro/yen flow remained extremely light Monday. Euro/dollar saw some downward pressure from a Swiss name selling above 0.8600, offset by light short covering interest.
Hourly charts looked to have formed a bear wedge defined by 0.8570-0.8645.
Daily charts continued to target 0.8370, although momentum indicators were quite oversold.
Direction after the offshore holidays is awaited, along with U.S. economic data.
The market reacted little to the news that U.S. Congress drove a sweeping $1.35 trillion, 10-year tax cut through Congress on Saturday. The tax cut would help enhance the long-term prospects for the economy, but economists are a bit skeptical about the short-term effect.