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FOREX-Yen gains as risk appetite ebbs, dollar holds above recent lows


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* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

* Safe-haven yen lifted by broad decline in stock markets

* EUR stalls as Trump considers sanctions over Russia gaspipeline

* Dollar takes increasing Fed rate cut expectations instride (Adds details and quotes, updates prices)

By Shinichi Saoshiro

TOKYO, June 13 (Reuters) - The yen gained broadly onThursday as risk appetite ebbed in the broader markets andlifted the safe-haven Japanese currency, while the dollar heldthe bulk of its gains against other major currencies afterrebounding from 11-week lows.

Equities in Asia slipped as risk sentiment deteriorated amiduncertainty towards the United States and China clinching a dealon the sidelines of the June 28-29 Group of 20 summit meeting inJapan. MKTS/GLOB

The mood in the region's stock markets was also subdued asHong Kong shares plunged for second day following massive streetprotests.

The yen rose 0.2% to 108.270 yen per dollar JPY= , pullingback from an 11-day low of 108.800 brushed at the week's start.

The yen, which tends to attract bids in times of marketturmoil and political tensions, rallied 0.5% against theAustralian dollar AUDJPY= and advanced 0.15% versus the euro EURJPY= .

"The risk aversion and falling stock markets are supportingthe yen as usual," said Bart Wakabayashi, Tokyo branch managerfor State Street Bank and Trust.

"The Australian dollar's underperformance is also a boosterfor the yen. Today's Australian jobs data did not appearparticularly poor, but apparently some in the market saw thedata as another opportunity to sell the Australian dollar."

Australia's unemployment rate stayed stuck at 5.2% in May asa surge in part-time hiring was met by an ever-expanding pool oflabour, a sure sign of spare capacity that argued for anothercut in interest rates perhaps as soon as next month. urn:newsml:reuters.com:*:nL4N23J47A

The Australian dollar AUD=D4 which fell the previous dayon sliding crude oil prices, extended losses and fell to atwo-week trough of $0.6905.

Despite mounting expectations that the Federal Reserve willease monetary policy in coming months, the dollar fared betteragainst other major currencies, such as the euro, pound andcommodity currencies, which had troubles of their own.

The dollar index .DXY versus a basket of six majorcurrencies was little changed at 96.919 after rising more than0.3% overnight.

The index had dropped to 96.459 on Monday, its lowest sincelate March, following a sharp decline in long-term U.S. Treasuryyields, which fell to near two-year lows last week after a softU.S. jobs report bolstered expectations for an interest rate cutby the Fed.

The euro took a hit after U.S. President Donald Trump saidon Wednesday he was considering sanctions over Russia's NordStream 2 natural gas pipeline project and warned Germany againstbeing dependent on Russia for energy. urn:newsml:reuters.com:*:nW1N22402M

Sterling slipped as British lawmakers on Wednesday defeatedan attempt led by the opposition Labour Party to try to block ano-deal Brexit. urn:newsml:reuters.com:*:nL8N23J56G

"Thanks to the poor performance of European currencies, thedollar has managed to rise although the latest inflation dataenhanced Fed rate cut expectations," said Takuya Kanda, generalmanager at Gaitame.Com Research Institute.

"The market now considers monetary easing by the Fed as aforegone conclusion. At the end of the day, the dollar willstill remain a relatively high yielding currency even after arate cut or two."

Data released on Wednesday showed U.S. consumer pricesbarely rose in May, pointing to moderate inflation that togetherwith a slowing economy increased pressure on the Fed to lowerinterest rates this year. urn:newsml:reuters.com:*:nL2N23I1A9

The euro was a shade higher at $1.1294EUR= afterretreating 0.35% overnight, while the pound stood little changedat $1.2692GBP=D4 following a loss of 0.3% on Wednesday.

The dollar was also buoyed as commodity-linked currencieswere pressured by a slump in crude oil prices.

The Canadian dollar CAD=D4 was little changed at C$1.3337per dollar after shedding roughly 0.5% the previous day.

Oil prices tumbled 4% on Wednesday to their lowestsettlements in nearly five months, weakened by anotherunexpected rise in U.S. crude stockpiles and by a dimmingoutlook for global oil demand. O/R (Editing by Simon Cameron-Moore) ((shinichi.saoshiro@thomsonreuters.com; Reuters Messaging:shinichi.saoshiro.reuters.com@reuters.net+813-6441-1774))






This article appears in: Politics , Stocks , World Markets , Economy
Referenced Symbols: EUR



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