* Euro stung by Ireland bank woes but still in uptrend
* Dollar falls vs yen on unexpected rise in jobless claims
* Dollar touches lowest against yen since BOJ intervention (Recasts; adds comments, details; updates prices, changes byline)
By Steven C. Johnson
NEW YORK, Sept 23 (Reuters) - The euro retreated from a five-month high against the dollar on Thursday, hobbled by worries about Ireland's economy and banks, while the yen hit its lowest against the dollar since last week's intervention.
Data showing Ireland's economy shrank 1.2 percent in the second quarter slowed the euro's upward momentum as it highlighted the struggles the country faces as it tries to shore up a troubled banking sector. For more see [ID:nLDE68M11D].
Selling from Asian accounts pushed the currency lower after it broke $1.34 in Europe but on the charts it was still in an uptrend, trading above its $1.3208 200-day moving average.
Support was seen around $1.3265 "and as long as we hold above it we're probably taking a breather here and sooner or later will have a go at yesterday's high" of $1.3440, said Andrew Chaveriat, technical strategist at BNP Paribas in New York.
While the euro looks overbought on a daily chart, Chaveriat said the weekly chart is telling a different story, which could provide the momentum to target $1.3510.
"Overbought signals on the daily chart may be scaring short-term traders into taking some profits, but longer-term traders don't seem too concerned yet," he said.
The euro was down 0.4 percent on the day at $1.3345
The euro wobbled Thursday as uncertainty over the cost of propping up Ireland's banking sector triggered concerns the country is on the edge of a debt crisis that could drag down other troubled euro zone economies. [ID:nLDE68L1Y4]
Pessimism about Ireland pushed yield spreads between 10-year government bonds in Ireland and Germany -- the most economically sound euro zone country -- to their widest ever.
Data showing euro zone growth slowed in September also took some of the shine off the euro. [ID:nSLAMKE6DH]
INTERVENTION WATCH
The dollar fell 0.2 percent to 84.38 yen
"The yen would be a lot stronger if not for intervention and the threat of intervention," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.
"The drop in short-term U.S. yields is consistent with 80 yen rather than 85 yen," he said, adding Japanese authorities would likely intervene again if the dollar fell below 83 yen.
Markets in Tokyo were closed for a national holiday but Japanese Prime Minister Naoto Kan was to meet U.S. President Barack Obama in New York on Thursday.
Obama will also meet Chinese Premier Wen Jiabao, who pushed back against pressure to revalue the yuan as U.S. lawmakers threatened to penalize China. [ID:nN22259575]
If the Federal Reserve decides to pump billions more dollars into the U.S. economy to boost a faltering recovery, a possibility it hinted at this week, U.S. yields and the dollar will likely fall further, making it tough for Japan to keep the yen weak.
Analysts said that was also helping to keep the overall
atmosphere bullish for the euro and other currencies such as
the commodity-linked, growth-sensitive ones such as the
Australian dollar
Chaveriat said the Reuters/Jefferies CRB commodities index <.CRB> has been testing resistance around 281, with any sustained break a bullish sign for commodity currencies.
An unexpected rise in weekly first-time U.S. jobless claims, meanwhile, added to the case for more Fed easing, making it "hard to justify pushing the dollar much higher," said Matthew Strauss, strategist at RBC Capital Markets. [ID:nLDE68M1RT] (Additional reporting by Vivianne Rodrigues in New York and Naomi Tajitsu in London; Editing by James Dalgleish)