(Reapeats to fix format)
* Euro near lows vs dollar, hits 2-month trough vs sterling
* Greek debt, peripherals stoke investor anxiety
* Stops seen around $1.3350 with support around $1.3340
By Charlotte Cooper
TOKYO, April 22 (Reuters) - The euro remained soft on Thursday on continued worries about Greece financing its debt obligations and concerns about other euro zone economies, while the yen benefited as investors closed risk trades in higher-yielders.
The pound, helped by upbeat data the previous day, hit a
two-month peak against the euro, which steadied around $1.3400
Traders say initial euro support is at $1.3340, the April 9 low, with loss-cutting sell orders lined up at $1.3350.
"There's a bit of caution and profit-taking going around following the fairly sharp rally in risk that we've seen in the early part of the week," said Sue Trinh, senior currency strategist at Royal Bank of Canada in Hong Kong.
The spread of Greek government bonds over benchmark German Bunds widened beyond 500 basis points on Wednesday, the highest in 12 years, while the cost of insuring against a Greek default climbed to a record high. [ID:nLDE63K2B8].
Spreads of Portuguese government bonds over Bunds also widened, spurring fears that the problems facing Greece could be seeping to other southern European countries.
"Peripheral European spreads have blown out with Greek spreads going through 500. That's weighed on most of the risk proxies generally," Trinh said.
Greece is racing to raise 10 billion euros next month and investors are increasingly convinced it will have to tap a euro zone and IMF package. It started talks with European and IMF officials on Wednesday on a potential aid deal but it could take several weeks before a plan can be finalised. [ID:nLDE63K0CE]
The euro fell to 86.75 pence
YEN GAINS
As well as some unwinding of positions in higher yielding currencies such as the Australian dollar which are funded by yen, dealers said the Japanese currency was also being bought by foreign players on newspaper reports the Bank of Japan may upgrade its inflation and growth forecasts.
The Yomiuri daily said the BOJ was expected to forecast consumer price growth of up to around 0.2 percent for the year to March 2012 in an outlook to be issued on April 30.
It was also likely to revise up its GDP forecast for the fiscal year ending next March 31 to around 2 percent from 1.3 percent projected three months ago. [ID:nTOE63L02B]
Foreigners were buying on the basis this meant the central bank would stay away from additional monetary easing steps, although the speculation is not new and was also an excuse for investors wanting to buy yen, a trader at a Japanese bank said.
"The yen is mostly being buoyed by short-covering on the back of a media report of the BOJ taking a more bullish stance on the economy and a fall in U.S. yields and stock prices, as well as continued uncertainty surrounding Greece," said Minoru Shioiri, chief manager of foreign exchange trading at Mitsubishi UFJ Securities.
The dollar fell 0.4 percent to 92.86 yen
The Australian dollar also shed 0.3 percent to 86.07 yen
The dollar index <.DXY>, which tracks the value of the greenback against a basket of six currencies, was almost unchanged at 81.159, after this week's trough of 80.76.
The Group of 20 and International Monetary Fund meetings start in Washington on April 22, and the focus is on two proposed new taxes on banks and Basel III proposals for tightening capital requirements for banks. [ID:nN14251988]
President Barack Obama is also due to speak later on Thursday and is expected to call on the financial industry to support regulatory reform. [ID:nN2185275] [ID:nN21118642]
"If Obama places an emphasis on regulation and stricter rules, that would be a downside risk for financial markets," said Shioiri of Mitsubishi UFJ Securities.
"Stocks as well as commodities such as oil could fall, and there's a risk the yen will attract more buying." (Additional reporting by Anirban Nag in Sydney and Kaori Kaneko and Aiko Hayashi in Tokyo; Editing by Joseph Radford)