FOREX-Yen steadies after BOJ; Aussie, kiwi gain on virus optimism

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

By Stanley White
TOKYO, April 27 (Reuters) - The yen held its ground on
Monday after the Bank of Japan removed limits on its government
bond purchases and increased corporate debt buying to help
companies hit by the coronavirus crisis.
The BOJ's decision was widely in line with expectations, so
traders instead shifted their focus to 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 traded at 107.36 per dollar on Monday in
Asia.
Against the euro, the yen EURJPY= traded at 116.30, close
to its strongest in three years against the common currency.
The BOJ previously had a loose pledge to buy government debt
so holdings increase by around 80 trillion yen ($745.30 billion)
a year.
The BOJ's decision to remove this guidance at a policy
meeting on Monday was largely symbolic, because actual bond
buying has slowed to an annual pace of less than 20 trillion yen
due to the central bank's outsized presence in the market.
The BOJ also said it would increase purchases of corporate
bonds and commercial paper as companies struggle with lost
revenue.
Japan, like most major economies, has urged businesses to
close and encouraged people to stay at home to slow coronavirus
infections, which is causing a widespread downturn.
The antipodean currencies were buoyed as investors
acknowledged the success both countries have had in emerging
from the coronavirus pandemic.
The Australian dollar AUD=D3 rose 0.58% to $0.6434 as more
than a million Australians rushed to download an app to help
trace close contacts of COVID-19 patients. The New Zealand dollar NZD=D3 gained 0.47% to $0.6044
before its strict lockdown is eased on Monday at midnight.
The Aussie AUDJPY= and kiwi NZDJPY= also managed to gain
against the Japanese currency.
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 $1.0834 in Asia on
Monday. Against the pound EURGBP= , the euro traded at 87.34
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 was little changed at $1.2402. 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.
($1 = 107.3400 yen)

(Editing by Richard Pullin and Jacqueline Wong)