* Yen maintains soft tone against dollar, euro
* But investors still cautious with more earnings this week
* BOJ extends corporate finance support measures
By Kaori Kaneko
TOKYO, July 15 (Reuters) - The yen maintained a soft tone on
Wednesday, trading in tight ranges after falling the previous day
when upbeat results from Goldman Sachs <GS.N> and Intel <INTC.O>
boosted investor appetite for stocks and modest hopes for an
economic recovery.
Goldman Sachs Group Inc said quarterly earnings surged 33
percent on strong trading results, trouncing forecasts and
putting the bank on track for hefty bonuses. []
Chipmaker Intel also reported results after the bell that
surpassed expectations, sending stock index futures sharply
higher. []
S&P futures <SPc1> rose 0.8 percent, indicating a firm start
on Wall Street later, but currencies were subdued, underlining
caution ahead of more earnings results and data.
"The next big thing the market is waiting for is the U.S.
financial company earnings later this week," said Akira Hoshino,
chief manager of FX trading at Bank of Tokyo-Mitsubishi UFJ.
"Goldman Sachs was basically expected to be good but the
market is less sure about the others."
Among U.S. corporations slated to announce quarterly earnings
this week are JPMorgan Chase & Co <JPM.N>, Bank of America Corp
<BAC.N> and Citigroup Inc <C.N>. []
The dollar shuffled sideways at 93.53 yen <JPY=>, after
advancing nearly 1 percent on Tuesday. It had hit a five-month
low of 91.73 yen on Monday.
Dealers expect gains in the U.S. currency to be capped when
it rises towards 94 yen, which was the previous support level
before it fell steeply last week.
The euro was 0.3 percent higher at 131.00 yen <EURJPY=R>, and
it was up 0.3 percent at $1.4005 <EUR=>. Sterling rose 0.3
percent to 153.14 yen <GBPJPY=R>.
The Bank of Japan voted to extend special corporate
finance-support measures by three months to avoid undermining a
fragile recovery in the economy and investor confidence.
Its board voted unanimously to keep buying commercial paper
and corporate bonds from banks and keep providing long-term loans
to banks at 0.1 percent interest, extending the measures it
introduced to deal with the crunch in credit markets.
[]
The BOJ had been expected to extend the steps, and the yen
took the news without moving. But some analysts were surprised
the extension was only for three months, saying this might be
because policy makers wanted to keep a close eye on their impact.
"The decision looks to be based on the view that economic and
financial conditions are still severe," said Mari Iwashita, chief
market economist at Daiwa Securities SMBC.
"But the bank limited its extension to three months, instead
of six months, so it can monitor step by step and avoid
distorting markets."
With earnings season underway, some dealers said they were
focusing on U.S. nonfinancial corporations that operate globally,
especially in emerging markets in Asia, to gauge whether domestic
demand in the region lifts earnings among those companies.
As part of this, the market is waiting for China's gross
domestic product for April-June due on Thursday. China's economy
probably grew 7.5 percent in the second quarter from a year
earlier, compared with a 6.1 percent rise in the first quarter.
[]
Investors are also looking ahead to the U.S. consumer price
index (CPI) and industrial production and capacity utilisation
data for June later in the day.
CPI is expected to show a 0.6 percent rise compared with a
0.1 percent rise in May. Core CPI is seen up 0.1 percent in a
repeat of the May increase, while production will likely show a
0.6 percent fall from a 1.1 percent fall the previous month.
(Additional reporting by Elaine Lies; Editing by Edwina Gibbs)
