Australian dollar lower at noon

THE Australian dollar was lower at noon, with weakness in the Japanese yen dominating market trading.

THE Australian dollar was lower at noon, with weakness in the Japanese yen dominating market trading.

At 1200 AEST tpday, the Australian dollar was at 103.74 US cents, down from Friday's local close of 104.15 US cents.

The local currency dipped below 104 US cents during the weekend offshore session in response to weaker-than-expected US jobs figures and as the sharp decline of the Japanese yen created new demand for the US dollar.

Today, the local unit traded in a tight range between 103.51 US cents and 103.79 US cents.

Commonwealth Bank currency strategist Peter Dragicevich said Australian dollar trading has been quiet in the absence of any local data or announcements.

Mr Dragicevich said the local currency was unlikely to move much ahead of the some Chinese trade data due on Wednesday and the domestic jobs report to be published on Thursday.

However, the massive stimulus plan announced by the Bank of Japan last week continued to push the Australian dollar to highs against the Japanese yen not seen since the 1990s.

At 1200 AEST, the Australian dollar was at 102.08 yen, up 1.7 per cent from 100.35 yen previously.

"In our view the change in the yen is more of a structural change," Mr Dragicevich said.

"The BoJ policy measures just add a little bit of momentum to that.

"We don't expect the yen to strengthen too much any time soon."

Meanwhile, the Australian bond market was firmer at noon.

At 1200 AEST, the June 10-year bond futures contract was trading at 96.780 (implying a yield of 3.22 per cent), up from Friday's local close of 96.685 (3.315 per cent).

The June three-year bond futures contract was at 97.230 (2.77 per cent), up from 97.160 (2.840 per cent) previously.