FOREX-Euro extends gains; yen seen broadly weakerFOREX-Euro extends gains; yen seen broadly weaker

* Euro hits 11-mth high above 120 yen
* Dudley’s dovish comments take shine off dollar
* Aussie rises to fresh 29-year high at $1.0422
By Ian Chua and Masayuki Kitano
SYDNEY/SINGAPORE, April 4 (Reuters) – The euro hit fresh 11-month highs against a broadly weaker yen on Monday and touched a five-month peak against the dollar with markets all but certain the European Central Bank will raise interest rates this week.
In contrast, the Bank of Japan is likely to downgrade its economic assessment at its meeting on Wednesday and may consider finding more ways to help the economy recover from last month’s massive earthquake and devastating tsunami.
This is likely to weigh on the Japanese currency, which is already under pressure following a rare coordinated G7 intervention to temper runaway yen gains on March 18.
The euro briefly popped above 120 yen for the first time since May 2010 and last traded at 119.69, up 0.2 percent from late U.S. trade on Friday.
“Coming into the ECB meeting this week, we have to anticipate further euro gains,” said Todd Elmer, currency strategist at Citi in Singapore.
The single currency hit a five-month high against the dollar of $1.4269 on trading platform EBS earlier on Monday, having gained a lift from some stop-loss buying, traders said, adding that more stops were seen towards $1.4300.
The euro later trimmed its gains to stand at $1.4222 , down 0.1 percent from late U.S. trade on Friday.
The euro’s rise brought it close to resistance at its November peak of $1.4283, a level that also roughly coincides with trendline resistance drawn from the euro’s record high struck in July 2008.
A clear breach of that resistance could open the way for the euro to climb further, with one possible target seen at $1.4374, the 76.4 percent retracement of the euro’s slide between November 2009 to June 2010.
“I don’t think investors are overly long at this stage. You could see some people forced to chase the move. That has the potential to fuel further gains,” said Elmer at Citi in Singapore.
YEN DIPS DOLLAR, EURO
The dollar edged up 0.1 percent to 84.17 yen , having risen to a six-month high near 84.74 yen on Friday on trading platform EBS, up 11 percent from its post-World War Two record low of 76.25 yen struck in March.
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