Yen slips, investors wait for Japan to act

The yen slipped further from a 15-year high against the dollar as investors wait to see if Japanese authorities will go beyond trying to just talk down the currency.
The greenback was under pressure after U.S. data on Wednesday heightened fears the world's biggest economy is at risk of another downturn. New home sales slumped to the slowest pace on record in July and durable goods orders were weaker than expected.
The dollar index, a gauge of its performance against a basket of six major currencies, edged down 0.3% to 83.035. Support is seen at the Aug. 24 low of 82.86 and the 82.00 level, while resistance stands at 83.556, a six-week high hit on Tuesday.
The euro further recovered from a nine-year trough against the yen after data on Wednesday showed business morale in Germany improved to its highest in more than three years in August, offsetting concerns about fiscally weak euro zone countries.
News that Bank of Japan Governor Masaaki Shirakawa will attend the Kansas City Federal Reserve conference in Jackson Hole, Wyoming, this week was making some players hesitant to push the yen higher.
"Investors are cautiously watching whether Japanese authorities will do something," said Hideki Amikura, deputy general manager of the forex section at Nomura Trust and Banking.
"Shirakawa is likely to speak to (Federal Reserve Chairman Ben) Bernanke and other central bankers in Jackson Hole, and that is prompting market players to speculate about possible Japanese action."
The Japanese government will urge the BOJ to ease monetary policy further to ease the pain in the economy from a strong yen in an economic stimulus package now being worked out, the Asahi newspaper said on Thursday.
The dollar edged up 0.2% from late U.S. trade to 84.71 yen after climbing as high as 84.89 yen earlier in the day. The greenback posted a 15-year trough of 83.58 yen on trading platform EBS on Tuesday.
The euro climbed 0.5% on the day to 107.55 yen. The single currency plunged as low as 105.44 yen on Tuesday, its lowest since 2001.
Traders said rises in the dollar/yen and cross/yen were led by speculators' short-covering due to caution about possible Japanese intervention, while many investors stayed on the sidelines.
Talk has been growing that Japan may intervene to stem the yen's rise for the first time since March 2004 as the currency nears an all-time high of 79.75 yen to the dollar hit in 1995, pushing the Nikkei average down to 16-month lows.
Meanwhile, Japanese exporters, having missed the chance to repatriate overseas profits before the recent spike in the yen, are keenly watching for the right time to sell dollars and euros, traders said.
Guessing how badly exporters may need to sell foreign currencies, some suggest that exporter selling of dollars and euros could offset Japanese authorities' efforts to weaken the yen, even if Japan finally acts, traders say.
Against the greenback, the euro rose 0.3% to $1.2695, having rebounded from a six-week low of $1.2588 hit earlier this week.