FOREX-Yen in tight range before BOJ decision, markets await Fed and ECB

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* FX markets looks to central bank meetings
* Coronavirus impacts test policymakers
* Currencies falling into tight ranges

By Stanley White
TOKYO, April 27 (Reuters) - The yen was hemmed into a tight
range on Monday before a Bank of Japan meeting where
policymakers may consider scrapping limits on bond purchases and
easing funding for companies hit by the coronavirus crisis.
Currency traders are also focused on a U.S. Federal Reserve
meeting ending Wednesday and a European Central Bank (ECB)
meeting Thursday as major central banks once again take the
stage as the global economy battles against a deep depression.
The Fed has already announced a raft of measures and is
expected to stay on hold this week, which is unlikely to trouble
the dollar, analysts say.
The stakes are higher for the euro, because the ECB is
likely to extend its debt purchases to include junk bonds, and
some investors are worried this decision could widen rifts
between members of the European Union.
"It will be difficult for markets to latch onto the BOJ,
because it has already reached the limit of what it can do,"
said Takuya Kanda, general manager of the research department at
Gaitame.com Research Institute in Tokyo.
"Every economy is suffering and all major central banks have
already eased policy a lot, so it's difficult to differentiate
from one currency to the next."
The yen JPY=EBS held steady at 107.41 per dollar on Monday
in Asia.
Against the euro, the yen EURJPY= traded at 116.29, close
to its strongest level in three years against the common
currency.
The yen also held steady against the Australian AUDJPY=
and New Zealand dollars NZDJPY= .
The BOJ is expected to leave unchanged its main policy
targets of guiding short-term rates to -0.1% and keeping the
10-year bond yield around zero. The BOJ will discuss scrapping its numerical target for
government debt buying, the Nikkei newspaper reported, in a show
of resolve to buy unlimited amounts of bonds.
Japan, like most major economies, has urged businesses to
close and encouraged people to stay at home to curb to slow
coronavirus infections, which is causing a widespread downturn.
In Europe and the United States, officials are now moving to
ease some of these restrictions, but currency traders say they
remain wary because threats posed by the virus have not been
eliminated completely.
The dollar has risen in recent weeks due to a dollar funding
crunch and safe-haven inflows, but some analysts say the
greenback is likely to fall in the long term because the Fed has
eased monetary policy more aggressively than other central
banks.
Positioning in currency futures may give dollar bulls some
reason to turn cautious.
Speculators' net bearish bets on the U.S. dollar rose to the
highest in nearly two years in the latest week, according to
calculations by Reuters and U.S. Commodity Futures Trading
Commission data. The euro EUR=EBS was little changed at $1.0825 in Asia on
Monday. Against the pound EURGBP= , the euro traded at 87.47
pence.
The ECB is under more pressure to act after EU policymakers
last week failed to reach a consensus on the details of a 1
trillion euro emergency fund. The pound GBP=D3 eased slightly to $1.2367. British Prime
Minister Boris Johnson is expected to announce plans for easing
a month-old coronavirus lockdown as early as this week, the
Telegraph reported. Johnson is due back at work on Monday after recovering from
COVID-19, the illness caused by the coronavirus.
However, there is a lot of uncertainty about the virus
testing regime in Britain and the strategy for exiting from
lockdown.