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FOREX-Yen dips as risk appetite rises, focus on US steps

Published 02/08/2009, 07:36 PM
Updated 02/08/2009, 07:40 PM

* Dollar hits one-month high vs yen

* Risk aversion eases on hopes for US economic measures

* Geithner to outline financial stability plan on Tuesday

By Masayuki Kitano

TOKYO, Feb 9 (Reuters) - The yen dipped broadly on Monday due to a rise in risk appetite on hopes that a U.S. stimulus package and a bank rescue plan would bolster the economy and ease worries about the financial sector.

The dollar hit a one-month high against the yen, with the Japanese currency carrying over its weakness from Friday, when U.S. shares rallied even as data showed that U.S. job losses in January were the deepest in 34 years.

"The rise in equities caused risk aversion to wane and triggered selling of the yen," said a trader for a Japanese bank.

With hopes for U.S. economic measures likely to lend support to stock markets for now, the yen will probably stay on the defensive in the near term, traders said.

The dollar rose 0.1 percent from late U.S. trading on Friday to 92.09 yen, after climbing to 92.42 yen earlier on trading platform EBS, its highest since early January.

The euro rose 0.4 percent to $1.2986 and was 0.5 percent higher at 119.60 yen.

In the stock market, the benchmark Nikkei share average rose around 2 percent.

The U.S. Treasury Department said on Sunday that Treasury Secretary Timothy Geithner would outline the Obama administration's financial stability plan in a speech at 1600 GMT on Tuesday.

The stabilisation steps were initially due to be unveiled on Monday, but the the Obama administration pushed back the announcement as it pressed lawmakers to settle their differences over a huge economic stimulus package.

There was little currency reaction to data showing that Japan's current account surplus fell 92.1 percent in December from a year earlier, and a separate indicator showing that Japan's core private-sector machinery orders fell by a smaller-than-expected 1.7 percent in December.

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