By: Hillel Fuld
The Japanese currency increased in value on Wednesday with investors citing yen purchaing by Japanese investors and exporters, while the Canadian dollar maintained its gains scored on news of a huge takeover bid by global miner BHP Billiton for Canada's Potash Corp.
The JPY dipped versus the dollar and the EUR in early Asian trading, staying on the defensive after retreating the previous day as U.S. and European shares increased and U.S. Treasury yields edged higher.
But the yen later received a push, with market players citing yen buying by Japanese investors and exporters in yen crosses and the dollar.
The dollar lost 0.1 percent vs the yen to 85.40 yen slipping back toward a 15-year low of 84.72 yen hit on EBS last week.
"The trend in dollar/yen remains downward," said Jun Kato, senior manager of the investment department at Shinkin Asset Management.
"The talk in the market is that a huge pile of dollar offers awaits above 86.50 yen. Given that, players must be thinking that chasing the dollar above 86.00 yen is a waste of time."
The EUR fell 0.4 percent to 109.67 yen, giving back much of the previous day's 0.6 percent increase and slipping back towards a nearly seven week low of 109.07 yen hit on trading platform EBS earlier this week.
Against the dollar, the euro dipped 0.3 percent to $1.2852
The greenback's moves against the yen have recently had a high correlation with U.S.-Japanese government bond yield spreads, which have narrowed as U.S. Treasury yields fell sharply in the past few months.
In addition to the talk of yen buying by Japanese exporters on Wednesday, a manager at a major Japanese bank said Japanese exporters were placing dollar offers from around 86.50 yen to 89.00 yen, having lowered their target levels for selling the dollar from around 90 yen previously.