* Yen falls broadly
* Talk of yen-selling related to Japan investment trusts
* Japanese poured $2.4 bln into mutual funds previous day
* Nikkei losses limited after US equities fell Wednesday
* US bond sell-off not immediately dollar-negative
By Masayuki Kitano
TOKYO, May 28 (Reuters) - The yen fell broadly on Thursday, hurt by talk of yen selling linked to Japanese retail demand for overseas assets, with higher-yielding currencies supported by signs of resilience in equities.
The yen fell a day after Japanese retail investors poured $2.4 billion into new mutual funds investing in global semiconductor firms, banks and U.S. junk bonds, in the biggest single day of fund launches this year.
Such investment trusts that target overseas assets can generate yen-selling flows, which often hit the market soon after they are launched.
"There is lots of buying by Japanese players. Since the investment trusts launched yesterday attracted a lot of money, there is talk that there could be some yen selling related to that," said a trader for a major Japanese bank.
In addition, higher-yielding currencies were supported against the yen because Tokyo share prices trimmed some of their losses after opening lower, the trader said.
The dollar rose 0.7 percent against the yen to 95.98 yen, pulling away from a two-month low of 93.85 yen hit last week.
The Australian dollar rose 0.9 percent against the yen to 74.54 yen and the euro rose 0.6 percent to 132.62 yen.
Growing hopes that worst of the U.S. and global economic recession may be over has helped spur a rally in currencies such as the Australian and New Zealand dollars over the past few months.
The New Zealand dollar eased after the government forecast net debt would peak later than economists had expected.
Unveiling its budget for the coming year, the New Zealand government said it would post its biggest budget deficit in 25 years and expected to remain in the red for up to 10 years, which would see debt more than doubling.
The New Zealand dollar fell from about $0.6160 to around $0.6115 at one point, but later trimmed some of its losses to stand at $0.6130, down 0.3 percent on the day.
DOLLAR STEADY
The dollar held steady against the euro, clinging to the gains it made on Wednesday, when U.S. shares fell on concerns that rising yields on Treasuries could hamper the U.S. economy.
The euro was little changed at $1.3821, having pulled back from a five-month high of $1.4051 hit on trading platform EBS last week.
Some market players said the fall in U.S. shares likely tempered risk appetite and triggered selling in the euro against the dollar on Wednesday.
Another possibility is that the dollar gained a lift from the rise in U.S. bond yields, said Koji Fukaya, a senior currency strategist for Deutsche Securities.
Despite the sell-off this week, there have been signs of overseas investor demand for Treasuries, Fukaya said.
"Long-term interest rate differentials have flipped over (in the euro's favour) and there are signs of overseas demand for U.S. bonds," Fukaya said.
Wednesday's auction of $35 billion in new five-year Treasury notes found good demand, particularly from indirect bidders, which are seen as a loose proxy for foreign central bank interest in Treasuries.
U.S. 10-year yields, which jumped nearly 20 basis points on Wednesday, were at 3.724 percent, slightly above 3.627 percent on 10-year euro zone bonds. (Editing by Michael Watson)