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FOREX-Yen slides broadly, hit by rise in risk appetite

Published 04/02/2009, 09:15 PM
Updated 04/02/2009, 09:24 PM

* Risk appetite boosted by G20, US accounting rules change

* Dollar rises above 100 yen for first time in 5 months

* Aussie hits 5-½ month high vs yen, 3-month high vs dlr

By Shinichi Saoshiro

TOKYO, April 3 (Reuters) - The yen fell to multi-month lows on Friday with its safe-haven status dented and investors showing more risk appetite after the G20 agreed to spend more to fight the global economic crisis and the United States said it would change accounting rules for handling bad assets.

Such developments hoisted Asian stocks higher, stemming flows into perceived safe havens such as the dollar and yen and lifting higher-yielding currencies such as the Australian dollar, which hit a three-month high against the greenback and a five-month peak versus the yen.

The euro also enjoyed support after the European Central Bank eased less than the market was braced for on Thursday, cutting rates by 25 basis points to 1.25 percent instead of an expected 50 points.

"There are key support levels along the way but the dollar and yen are on course for a retreat," said Hideaki Inoue, chief manager of forex trading at Mitsubishi UFJ Trust Bank.

"A short lull may ensue after the U.S. employment numbers are released, but the yen could soon resume testing fresh downsides against other currencies," Inoue said.

U.S. employment data on Friday is seen as a potential dampener of risk appetite, with economists in a Reuters survey forecasting 650,000 jobs were lost and the unemployment rate hit a 26-year high of 8.5 percent in March.

The euro edged up 0.1 percent to $1.3470 and gained 0.7 percent to 134.88 yen.

The greenback rose 0.6 percent to 100.16 yen, going above the 100 yen threshold for the first time in five months.

The Australian dollar climbed 0.6 percent to $0.7205, rising above $0.7200 for the first time in three months, and surged 1.3 percent to 72.21 yen after hitting a five-month high of 72.31 yen.

The New Zealand dollar rallied 2.3 percent to 58.95 yen after touching a five-month high of Y59.01

Tokyo's Nikkei share average rose 1.8 percent.

On Thursday world leaders clinched a $1.1 trillion deal to counter the worldwide economic crisis and the United States said it would change accounting rules to allow banks more flexibility in valuing toxic assets. (Editing by Michael Watson)

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