By Yumi Kuramitsu
Hong Kong, June 14 (BridgeNews) - The Japanese yen was little changed against the dollar in quiet Asian trade Thursday as the currency erased earlier gains after it failed to test an overnight high of 121.55. Sentiment for the yen was hurt by bearish comments from Japanese officials over the outlook of the nation's economic growth in April-June. The yen traded 122.06 as of 1500 JT, compared with the region's high of 121.68 and little changed from the New York closing level of 122.04.
The yen strengthened against the greenback to the region's high of 121.68 in the morning trade as the Japanese unit was bought on profit taking. Some dealers bought the yen in an attempt to trigger orders to cut losses below 121.50-55.
"There were no specific fundamental reasons for today's dollar/yen movements. The pair fell in the morning as the market aimed to trigger stop-loss orders below 121.50, but those who sold the pair bought it back after their attempt was failed," said Yasuji Yamanaka, deputy general manager of the Treasury Division at the Nikko Trust and Banking Corporation.
Then, the yen erased gains and fell back above 122.00 as speculators bought back the dollar against the yen after failing to test the downside and as sentiment for the yen was undermined by comments from Japanese Finance Minister Masajuro Shiokawa and Liberal Democratic Party Secretary General Taku Yamasaki. Shiokawa reportedly said Tuesday morning Japan's second quarter gross domestic product is expected to be worse than first quarter figure, while Yamasaki said the April-June GDP would show the country's economy worsened further from the January-March period.
Japan's January-March real GDP fell 0.2% on the quarter, or an annualized 0.8%, on a seasonally adjusted basis, after showing a revised 0.6% increase in the previous quarter, it was announced earlier this week. The data was below the market average outlook of a 0.2% gain, or an annualized 1.0% rise. The trading was relatively quiet as the market awaited the Japanese government's monthly economic report and U.S. May producer price index data due out Thursday as well as the outcome of the Bank of Japan board meeting due out on Friday.
Amidst the government's pressure on the central bank to further ease policy, BOJ Governor Masaru Hayami told the upper house financial committee Tuesday morning, "We are not thinking of implementing a further monetary measure for now."
Euro/yen mostly followed the movements in dollar/yen, traded in a range of 104.03-49.
Japanese press reports indicated that life insurance companies will be required to obtain the approval of policyholders at a general meeting and through a direct mail ballot when they hope to lower the rate of return on policies without going bankrupt.
According to the Nihon Kezai Shimbun, the requirement will be included in an interim report to be compiled by the Financial System Council by the end of June.
Japanese stock market had little impact on the foreign exchange market. Shares ended mixed Thursday as lingering gloom over Japan's economic slump curbed technical gains. Market participants generally stayed on the sidelines as they awaited the outcome of the BOJ's policy board meeting, scheduled to conclude Friday.
The Nikkei 225 Stock Average was up 23.21 points, or 0.2% to 12,846.66, and The Tokyo Stock Price Index fell 0.07%, or 0.9 points to 1,271.83. Euro/dollar traded quietly within 0.8542-0.8558. Despite talk of numerous buy-stops above 0.8570, there was talk of options related selling ahead of 0.8570