FOREX-Dollar hits 15-yr low vs yen after Japan vote

* Dollar/yen hits 15-yr low; Japan PM wins vote

* Euro hobbled by weaker-than-expected data

* Dollar falls below parity vs Swiss franc

* Chinese yuan rises vs dollar

(Updates prices, adds data, comment, changes byline, dateline, previous LONDON)

By Steven C. Johnson

NEW YORK, Sept 14 (Reuters) - The dollar slid to a 15-year low against the yen on Tuesday after Japan's prime minister won a ruling party leadership vote, while the euro struggled after an unexpectedly sharp decline in German investor sentiment.

A report showing U.S. retail sales increased more than expected in August for their best month in the last five brightened investors' economic outlook a bit, helping the euro make up some lost ground. [ID:nN13206701]

But the focus was on the yen. Japanese Prime Minister Naoto Kan keep his job after an unexpectedly decisive victory over party heavyweight Ichiro Ozawa, who had been more strident in his calls to intervene to weaken the yen. [ID:nTOE68D06W]

The dollar fell to 83.07 yen on trading platform EBS and was last at 83.25 , down half a percent on the day. Traders said dollar buying ahead of options barriers at 83 arrested the slide and cited more "stop-loss" orders around 82.85 yen.

The euro was down 0.2 percent at $1.2850 and 0.7 percent at 107.02 yen .

If Japan intervenes to weaken the yen, it would likely do so without U.S. or European help, analysts said.

"The threat of intervention will hang over the market but will there be international cooperation? Probably no. So the market will continue to test Kan's resolve," said Simon Derrick, head of currency research at BNY Mellon.

Analysts said if the dollar falls past 83 yen and hits 82 yen in a couple of hours, the risk of intervention would rise dramatically.

"With the political drama out of the way, economics will drive intervention and if there is a rapid appreciation you could see them coming to stop it," said a currency strategist at a Japanese bank.
PDF on Japan leadership vote: http://r.reuters.com/vyk92p

EURO PARES LOSSES, YUAN RISES

But Boris Schlossberg, head of research at GFT Forex, said traders would likely try to push the dollar down to 80 yen, though he said if U.S. economic data starts to improve, those with short dollar positions could be in for a squeeze.

Monday's 84.43 yen intraday peak remains resistance due to expectations Japanese exporters would sell more dollars before their half-year book closing on Sept. 30.

Weak U.S. data and falling U.S. yields have accelerated the dollar's slide against the yen. "Ultimately, (dollar/yen) is a bond trade," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange,

A 0.4 percent rise in U.S. retail sales was one positive surprise that Eisner said "reduces some concern about a double-dip recession".

That helped the euro recover to $1.2858 after earlier dipping to $1.2830 after Germany's ZEW survey showed investor confidence fell by much more than expected. The euro was still down 0.2 percent. [ID:nDEP003349]

A major resistance point was seen at $1.2920-30, a level that has blocked the currency several times since August.

Lingering doubts about the world economy continued to boost the Swiss franc, which hit a nine-month peak at 0.9996 per dollar .

"The franc was helped by a lot of customer flows from Europe, investors who are moving away from risk," said Paul Robson, currency strategist at RBS.

China's yuan hit its highest level against the dollar since June, when Beijing loosened the peg against the U.S. currency.

Treasury Secretary Timothy Geithner will discuss China's exchange rate before Congress on Thursday. Ninety lawmakers signed a letter urging the House of Representatives to get tough on Chinese currency and trade practices. [ID:nN13210541]

(Additional reporting by Gertrude Chavez-Dreyfuss and Vivianne Rodrigues in New York and Tamawa Desai in London; Editing by Chizu Nomiyama)