* Yen trims losses, trades in ranges vs dollar, euro
* Tokyo shares erase much of their gains, fuel risk aversion
* G20 fails to ease global recession worries
* Japan slips into recession in Q3
By Satomi Noguchi
TOKYO, Nov 17 (Reuters) - The yen trimmed losses against the
dollar and euro on Monday as Tokyo stocks erased much of their
earlier gains, fuelling investors' risk aversion.
Investors had initially turned more risk averse after the
Group of 20 financial summit at the weekend failed to produce
concrete measures to avert a global downturn, underpinning the
yen as a safe-haven currency.
The Nikkei share average's rise of more than 3 percent
earlier in the day <> reduced safe-haven buying of the yen
and dollar in reaction to the G20 summit, weak U.S. economic
data and late slide on Wall Street on Friday.
U.S. data showed a record fall in retail sales in October.
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The yen was also hurt by data showing Japan slid into
recession in the third quarter along with the euro zone.
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But the Japanese currency trimmed losses as the earlier rise
in the Nikkei evaporated, with the benchmark index ending the
day up 0.7 percent.
"There are a lot of uncertainties over the global econonmy
and financial conditions, which may be reflected in the
sluggishness of the stock market, and helping to keep intact the
safe-haven appeal of the yen," said a senior dealer at a
Japanese trading firm.
The euro fell 0.3 percent from late New York trade on Friday
to 121.90 yen <EURJPY=R>, off the day's high of 122.86 yen and
the low of 120.20 yen hit in early trade on trading platform
EBS, with thin liquidity in the market exaggerating price
movements.
The U.S. dollar was nearly flat at 96.96 yen <JPY=>, after
rising as high as 97.56 yen earlier, but up from an earlier low
of 95.87 yen.
The euro eased 0.3 percent to $1.2566 <EUR=>, off the day's
high of $1.2596.
"Trading is limited to narrow ranges as the market searches
for a clear direction," the senior dealer said.
The G20 leaders from major industralised and developing
countries produced lots of pledges of action but no concrete
plan to ease global recession worries, which had earlier
supported gains in the yen and the dollar. []
"The summit also noted the need for broader policy
responses, but mainly left it to individual economies to take
the appropriate monetary and fiscal policy measures," noted
analysts at ANZ.
Investors had hoped for an overall plan that would stimulate
the global economy in the short term.
Market players are now waiting to see if developed and
emerging economies will launch more economic stimulus plans, and
how quickly such measures would be implemented.
"Speed is the most important part of the policy actions as
world economies deteriorate quickly and more investors may need
to liquidate risky investments," said Hideaki Inoue, chief
manager of forex trading at Mitsubishi UFJ Trust Bank.
The Australian dollar initially sank more than 1.5 percent
to $0.6363 <AUD=D4>, but then jumped quickly near $0.65. Dealers
suspected the Reserve Bank of Australia was intervening in the
market, but the central bank would not confirm it had acted. The
Aussie was nearly flat to trade at $0.6460.
The RBA intervened on at least two occasions last week,
buying the Aussie around $0.6350 when the market was disorderly
and lacking liquidity.
(Additional reporting by Wayne Cole in Sydney and Chikako Mogi
in Tokyo; Editing by Chris Gallagher)
