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FOREX-Yen rises broadly, eyes on choppy Chinese shares

Published 08/20/2009, 10:04 PM
Updated 08/20/2009, 10:06 PM

* Dip in Tokyo, Chinese shares lends support to yen

* Aussie falls, Moody's warns on state ratings

* Japan exporters, technical factors weigh on dollar/yen

By Masayuki Kitano

TOKYO, Aug 21 (Reuters) - The yen rose broadly against major currencies on Friday as investors remained worried about the potential for further weakness in Chinese shares and shied away from risky investments.

The yen rose against currencies leveraged to global growth such as the Australian and New Zealand dollars, and also versus the dollar and the euro as a dip in Tokyo shares stirred worries that Chinese shares may open weaker as well.

Shanghai shares opened 0.2 percent lower, but later edged back into positive territory. Traders said moves in Chinese equities are likely to remain a key driver of currency moves, especially during Asian trading hours.

The dollar fell 0.3 percent to 93.93 yen, approaching a one-month low of 93.66 yen hit on trading platform EBS earlier this week.

A trader for a Japanese brokerage cited dollar-selling by Japanese exporters, and added that the dollar's weakness against the yen was partly due to technical factors.

The greenback has fallen below the bottom of the cloud on daily Ichimoku charts this week, a bearish technical signal.

The euro slipped 0.3 percent to 133.79 yen. Against the dollar, the single European currency held steady at $1.4250.

Chinese stocks had recouped 4.5 percent on Thursday, posting their second-biggest daily percentage gain of the year, as modest signs of official support for the market helped to trigger technical buying after a 20 percent dive in the two weeks to Wednesday's close.

The Australian dollar slipped 0.3 percent to $0.8283 and fell 0.7 percent against the yen to 77.74 yen, edging back in the direction of a one-month low of 76.66 yen hit earlier this week.

Sentiment toward the Australian dollar was hurt after ratings agency Moody's Investors Service repeated its concerns about the deteriorating financial position of many of Australia's states and said downgrades cannot be ruled out.

Moody's added, however, that it believes most of the states have the capacity to withstand less supportive conditions at their current rating levels. (Additional reporting by Yoshiko Mori in Tokyo, Wayne Cole in Sydney; Editing by Joseph Radford)

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