* FX intervention fears continue
* Yen gains slightly vs dollar; euro climbs
* World stocks weak, Wall St set for losses
By Jeremy Gaunt, European Investment Correspondent
LONDON, Sept 16 (Reuters) - Currency markets struggled to
settle down on Thursday after Japan's huge intervention to
weaken the yen a day earlier, with investors speculating whether
more was to come.
The euro as one of the main gainers on the day, rising to
one-moth highs particularly after a successful Spanish bond
auction eased some fears about a return of the sovereign debt
crisis.
World stocks, meanwhile, slipped from their recent high and
Wall Street looked set to follow suit with losses at the open.
Investors were still coming to terms with Wednesday's
currency intervention by Japan, its first in six years. The Bank
of Japan's money market data showed the yen-selling intervention
may have totalled around 1.76 trillion to 1.86 trillion yen
($20.52-21.69 billion). []
Adding to investor jitters, Japanese Prime Minister Naoto
Kan pointed to more yen selling if needed.
There was, however, no sign of intervention on Thursday,
which allowed the yen to regain a tiny bit of strength after the
dollar gained more than 3 percent on it the day before.
The dollar was down 0.1 percent at 85.64 yen <.JPY=>. The
intervention occurred after it hit a 15-year low of 82.87 yen on
Wednesday.
Wednesday's move was designed to protect Japanese exports
from a too-competitive exchange rate and ward off job losses.
Some market players may be willing to test Japan's resolve, but
there was little indication on Thursday.
"It's too early to take on Japanese authorities," said David
Bloom, head of global currency strategy at HSBC. "I expect
dollar/yen to move higher."
The main mover on the day was the euro. It gained around 0.6
percent against the dollar <EUR=> to $1.3079 and a half a
percent against the yen <EURJPY=> to 112.00 yen.
These kinds of moves will not be welcome to Europe's
exporters, but the gains were also boosted by a very strong
Spanish bond sale.
Spain sold a combined 4 billion euros in 10- and 30-year
bonds, at the top of its targeted range, attracting solid demand
and lower yields than its last auction in June. []
The country was among those most in the limelight during the
sovereign debt crisis earlier this year.
STOCKS EASE
With the yen levelling off from Wednesday's falls, Japanese
stocks came off a 5-week high.
"The yen's retreat hasn't been as big as the market had hoped
-- dollar/yen has yet to touch 86 yen -- and the yen remains on
the strong side. That weighed on stocks that have been boosted
by short-covering," said Mitsushige Akino, chief fund manager at
Ichiyoshi Investment Management Co.
The Nikkei <> ended down 0.07 percent.
European shares fell for a third straight day, partly
because of disappointing economic numbers.
British retail sales volumes fell last month for the first
time since January after drops in sales of food, fuel, clothes
and household goods. []
The FTSEurofirst 300 <> index of top European shares
was down 0.3 percent.
Overall, world shares as measured by MSCI <.MIWD00000PUS>
and Thomson Reuters <.TRXFLDGLPU> were down around 0.1 percent.
(Additional reporting by Naomi Tajitsu; Editing by Ron
Askew)
