* Yen off lows against euro, Australian dollar
* Dollar index nears 16-mth low
* Dollar extends recent losses vs some Asian currencies
(Recasts, adds quotes, changes dateline, pvs SYDNEY/SINGAPORE)
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 bearish bets against the Japanese currency appeared stretched and investors looked to take a breather.
While some technical indicators suggested that rallies in the euro and the Australian dollar against the yen could pause in the short run, traders said the longer-term trend of yen weakness was likely to remain intact as demand for yen carry trades picks up.
"The Aussie/yen positions are clearly overbought and ripe for a correction," said Adam Myers, senior currency strategist at Credit Agricole. "Should the U.S. dollar start to reverse course, and that trend will become clear this week, we will see some of those big carry trade positions being unwound."
For now, though, the U.S. dollar eased back in the direction of last week's 16-month low against a basket of major currencies , and also extended its recent losses against some Asian currencies.
A number of Asian central banks are said to have intervened to prevent their currencies from rising, and traders said they were likely to recycle those proceeds into the euro, lending support to the common currency.
The euro slipped 0.1 percent to $1.4465, hovering around the 21-hour moving average at $ 1.4454, with bids said to be around the $1.4410-25 area and lower. It had hit a 15-month high of $1.4489 on Friday.
The euro touched its highest against the yen since May 2010 of 123.33 yen on trading platform EBS. It later gave up some of those gains and was last down 0.15 percent at 122.56.
The yen has fallen sharply in the wake of joint yen-selling intervention by the Group of Seven nations in March. The G7 stepped in after the yen hit a record high of 76.25 yen to the dollar on March 17, propelled by speculation that Japanese investors would repatriate their overseas assets after a massive earthquake and tsunami struck Japan's northeast on March 11.
Market expectations for the Bank of Japan to lag behind other central banks in raising interest rates and a drop in volatility after the G7 intervention have shifted the focus to the appeal of carry trades, a tactic of selling low-yielding currencies to fund investment in higher-yielding ones.
OVERBOUGHT POSITIONS
Technical indicators such as the 14-day relative strength index and slow stochastics suggest that the euro and Australian dollar are in overbought territory against the yen, pointing to the possibility of a near-term pull-back.
"If you look at gauges such as stochastics ... they are clearly in overbought territory," said Tsutomu Soma, senior manager for Okasan Securities' foreign securities department in Tokyo, referring to the recent rally in the euro and other currencies against the yen.
Despite signs of a near-term correction, he added that investors were reluctant to trim short yen positions as they remained uncertain about its short-term prospects.
"People might sell the euro against the yen in the morning but they will probably make sure to buy it back in the evening," he added.
Positioning in the Australian dollar also looked stretched judging from the U.S. Commodity and Futures Trading Commission's (CFTC) latest data, which showed that currency speculators held a record long position in the Aussie dollar in the week to April 5.
The Australian dollar touched a high of 90.04 yen earlier on Monday, its highest since September 2008. It later pared some of its gains and was at 89.52 yen. The Aussie dollar rose 0.1 percent against the dollar to $1.0573, near Friday's 29-year high of $1.0585.
In a positive sign for global growth and risk trades, Chinese data on Sunday showed exports and imports were both stronger than expected in March, with little sign of any impact from the Japanese quake.
CFTC data also showed speculators go 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.
The dollar did manage to eke out gains against the yen, however, inching up 0.1 percent to 84.80 yen. The dollar faces a cluster of resistance at levels around 85.50 yen, including a six-month high of 85.53 yen hit last week on EBS. Against a basket of currencies, the dollar was down 0.2 percent at 74.93, near Friday's 16-month low of 74.838. (Additional reporting by Ian Chua in Sydney and Masayuki Kitano in Singapore; editing by Stephen Nisbet)