FOREX-Yen creeps up, market stays on intervention alert

* Japan exporters tiptoe into market to sell dollar

* Market looking to comments by U.S. Treasury's Geithner

* Japan PM Kan says will take decisive steps as needed

By Hideyuki Sano

TOKYO, Sept 16 (Reuters) - The yen crept higher on Thursday but the market was on the alert for more intervention by Japanese authorities after a massive amount of yen-selling the previous day knocked the yen off a 15-year high against the dollar.

Some traders see chances of another round of intervention increasing if the dollar slips back below 85 yen, after Japan sold an estimated 2 trillion yen ($23 billion) on Wednesday, a record for a single day, in a move seen as aimed at showing its resolve to curb yen strength.

The market is also watching what U.S. Treasury Secretary Tim Geithner might say later in the day about Japan's intervention, which boosted the dollar by more than 3 percent, its biggest daily gain against the yen in almost two years.

"Intervention will likely continue for a while, perhaps for quite a long time, because once authorities start it, it's not something that they can stop easily," said a trader at a major Japanese bank.

Prime Minister Naoto Kan reiterated on Thursday that Japan would take decisive steps on yen rises if needed, Jiji news agency reported.

The dollar fell about 0.5 percent to 85.30 yen as some Japanese exporters took advantage of its jump to sell dollars earned overseas, pushing it off Wednesday's high of 85.78 yen hit on electronic trading platform EBS.

The dollar sprang up from a 15-year low of 82.87 yen on Wednesday after Japanese authorities, concerned that the yen's rise will hurt the economy by squeezing exporters' profits, stepped into the market for the first time in six years.

Traders have said Japanese exporters wanted to sell the dollar above 85 yen before their half-year book-closings at the end of September.

"Looking at the dollar's surge yesterday, some Japanese exporters may want to wait a bit more before they sell the dollar," said Teppei Ino, an analyst at Bank of Mitsubishi-Tokyo UFJ.

POSITIONS BUILDING UP

Institutional investors may hold back from selling the dollar against the yen in anticipation of a further rebound in the dollar, said Kimihiko Tomita, the head of forex at State Street Global Markets.

"According to our data, institutional investors have started to close their yen-short/dollar-long positions since mid-August, which I think helped to accelerate the yen's rise. Intervention could make those investors think twice about closing their positions," he said.

Speculators who have bought the yen heavily may be forced to close their positions if the yen continues to fall.

Data from the U.S. Commodity Futures Trading Commission showed last week that speculators have a big net yen long position of 52,183 contracts. [ID:nN10229952]

"My hunch is that not all of these positions have been unwound yet. So there could be more short-squeezing if the dollar rallies," said a trader at a Japanese bank.

Yet the dollar faces many resistance levels on the upside as well, starting with its 20-day upper Bollinger Band around 85.80. More resistance is seen around 86.30, where the bottom of an Ichimoku cloud sits on Thursday.

Some traders are already building up long dollar/yen positions as they speculate that more yen-selling intervention may be in the offing, which suggests profit-taking could emerge at any time.

The market will be looking to Geithner's testimony to the Senate Banking Committee at 1400 GMT as Japan's intervention could have complicated his efforts to persuade China to let the yuan appreciate. [ID:nN15187797]

Any criticism by Geithner of Japan's intervention could spark speculation that Japan may scale back its activity, dealers said.

On Wednesday, U.S. lawmaker Sander Levin, who chairs the U.S. congressional committee examining China's currency policy, described Japan's intervention as "deeply disturbing". [nTOE68E02W]

Geithner will tell lawmakers in prepared testimony that China's yuan currency has risen too slowly and he is examining what tools may be needed to persuade Beijing to move faster. [ID:nN15211310]

The euro traded at 110.76 yen , now down about 0.7 percent on the day and off a one-month high of 111.63 yen struck on Wednesday.

Elsewhere, the New Zealand dollar slipped half a U.S. cent to around $0.7260 after the country's central bank signalled that interest rates would likely not rise as far or fast as many had expected.

The head of the Reserve Bank of New Zealand (RBNZ), Alan Bollard, said the kiwi's strength was not justified by the country's fundamentals, pushing the kiwi to five-month low against the Australian dollar . (Additional reporting by Masayuki Kitano and Aiko Hayashi; Editing by Michael Watson)