FOREX-Yen sell-off pauses after fresh quake; euro dips

* Yen off lows against euro, Australian dollar

* Investors trim short yen positions after new quake

* Euro slips, options expiry at $1.4450 seen influencing mkt

(adds quote, updates prices)

By Anirban Nag

LONDON, April 11 (Reuters) - The yen was off an 11-month low against the euro and a 2-1/2 year trough versus the Australian dollar on Monday, as another earthquake in Japan led some investors to pare bearish bets against the country's currency.

Traders said speculator positioning and some technical indicators suggested that rallies in the euro and the Australian dollar against the yen could pause in the short run with the latest in a series of quakes being used by some to book profits.

With investors wary of taking on more risk, the euro also dipped versus the dollar, staying below Friday's 15-month high of $1.4489. Traders said an options expiry at $1.4450 was likely to influence price action, keeping it close to that level.

"(The latest Japan earthquake) has put a cap on the risk-on trade we saw earlier in the session. Equity futures are off their highs and cross/yen positions are being pared back," said Jeremy Stretch, head of currency strategy at CIBC World Markets.

The euro was down 0.25 percent at 122.40 yen , well below its highest since May 2010 of 123.33 yen hit earlier on trading platform EBS. The Australian dollar was down at 89.32 yen , having scaled a high of 90.04 yen earlier, its strongest since September 2008.

A fresh strong aftershock hit Japan on Monday, while the evacuation zone around its crippled nuclear plant was expanded because of high levels of accumulated radiation. [ID:nL3E7FA058]

Against the dollar, the euro was down 0.2 percent at $1.4451. Some traders cited influence from the 21-hour moving average around $1.4460.

But the euro was expected to stay supported by interest rate differentials after last week's 25 basis point hike by the European Central Bank.

"The ECB hike and subsequent press conference did not bring many surprises, but the sustained upward pressure on EUR/USD suggests that net long positions may have been built further since," Danske Bank said in a note.

A number of Asian central banks were also said to have intervened to prevent their currencies from rising, and traders expected they may recycle those proceeds into the euro.

SHORT YEN POSITIONS RIPE FOR PULLBACK

Data from the Commodity and Futures Trading Commission (CFTC) showed speculators went net short on the yen for the first time in six weeks and by the biggest margin since May 2010 at a net 43,231 contracts in the week to April 5. [IMM/FX]

Technical indicators such as the 14-day relative strength index and slow stochastics also suggested that the euro and Australian dollar are in overbought territory against the yen, pointing to the possibility of a near-term pull-back.

Commerzbank technical analyst Karen Jones said near-term support for euro/yen lay around the 121.55/60 yen area, the lows hit in late February 2010, adding short yen positions could see some more profit taking in the short run.

She saw near-term support for the Australian dollar at 86.40 yen, the 23.6 percent retracement of its recent rally from a low of 75.05 on March 17 to a high of above 90 on Monday.

The yen has fallen sharply in the wake of joint yen-selling intervention by the Group of Seven nations in March, and on expectations the Bank of Japan will lag other central banks in raising interest rates.

The dollar was last steady at 84.68 , having hit the day's low around 84.55 yen soon after news of the fresh tremors.

Positioning in the Australian dollar also looked stretched, with CFTC data revealing currency speculators held record long positions in the Aussie dollar in the week to April 5.

The Australian dollar was down 0.1 percent at $1.0546, with one trader reporting selling by Asian corporate names. It remained close to Friday's 29-year high of $1.0585.

(Additional reporting by Jessica Mortimer; Editing by John Stonestreet)