FOREX-Yen gains as weaker stocks raise risk aversion

                                
 * Yen higher as investors seek safety in Japanese currency
                                
 * Japanese shares fall, U.S. financial plan disappoints
                                
 * Markets unimpressed by $789 bln U.S. package agreement
                                
 * Aussie falls after parliament rejects stimulus plan
                                
 By Kaori Kaneko
                                
 TOKYO, Feb 12 (Reuters) - The yen rose against other major
currencies in safe-haven trades on Thursday, with investors
shying away from risk as Japanese share prices fell on
disappointment over financial rescue plans in the United States.
                                
 The yen was well-bid as a 3 percent fall in the Nikkei
average <.N225> prompted Japanese investors returning from a
public holiday on Wednesday to seek safety in the currency.
                                
 U.S. congressional negotiators reached a deal on Wednesday on
$789 billion in emergency spending and tax cuts aimed at pulling
the economy out of a deepening recession, and voting on it could
take place as early as on Thursday. [ID:nN11379390]
                                
 But the agreement failed to ease investors' caution.
                                
 "What the U.S. is trying to do is heading in the right
direction and its efforts will bring positive effects on the
economy, but it will take time and it's hard to predict when,"
said Minoru Shioiri, chief manager at Mitsubishi UFJ Securities.
                                
 Disappointment also continued over lack of detail in a
separate $2 trillion rescue programme for U.S. banks unveiled on
Tuesday, especially over how a public-private partnership would
buy up bad assets, leaving traders in Tokyo to take their cue
from share markets.
                                
 "Everyone wants more detail. They don't seem to be comforted
by vague assurances," one trader at a European bank said.
                                
 U.S. stock futures hovered in negative territory, signalling
a weak start on Wall Street, and the MSCI index of Asia-Pacific
stocks excluding Japan <.MIAPJ0000PUS> fell 1 percent.
                                
 Analysts said investors hoped government efforts to lift
economies would gain traction soon but meanwhile poor data
continued to come through, limiting market direction.
                                
 Japanese wholesale prices fell in the year to January, the
first such drop in five years, bringing the economy closer to its
second bout of deflation in a decade. [ID:nT76442]
                                
 Data due next week is expected to show the world's
second-largest economy shrank at its fastest pace since 1974 in
the final three months of 2008.
                                
 The dollar fell 0.4 percent from late U.S. trading on
Wednesday to 90.03 yen <JPY=>.
                                
 The euro was unchanged at $1.2903 <EUR=EBS> but fell 0.4
percent to 116.14 yen <EURJPY=>.
                                
 AUSSIE TUMBLES
                                
 The Australian dollar <AUD=D4> fell 0.25 percent to $0.6535
after parliament rejected the government's A$42 billion ($28
billion) economic stimulus plan, delaying the timing of cash
payments to millions of workers and families.
                                
 The government will reintroduce the bill and is still
expected to get it passed eventually. [ID:nSYD401238]
                                
 But the delay could add to the case for another rate cut and
the news knocked the Aussie into reverse from gains made earlier
on data showing a surprise rise in employment.
                                
 The Aussie also tumbled against the yen, dropping 0.7 percent
to 58.83 yen <AUDJPY=R>.
                                
 Group of Seven finance ministers meet in Rome on Friday and
Saturday and U.S. Treasury Secretary Timothy Geithner will urge
his counterparts to take bold action to pull the global economy
out of recession and prop up financial institutions.
                                
 A Treasury official said Geithner will also brief other
participants on the new U.S. financial bailout plans.
[ID:nN11386330].
                                
 European Central Bank (ECB) Governing Council member Erkki
Liikanen said in an interview published on Thursday that the
worst of the global financial crisis may be yet to come, and the
crisis seemed to be lasting longer and spreading.
                                
 ECB board member Gertrude Tumpel-Gugerell said the central
bank had not exhausted its interest rate policy and was
considering how to proceed.
                                
 The ECB kept rates at 2.0 percent at its February policy
meeting last week but President Jean-Claude Trichet signalled
that a rate cut could come in March.
                                
 Sterling fell 0.2 percent to $1.4384 <GBP=> after Bank of
England Governor Mervyn King said the central bank will probably
have to ease monetary policy further and could start quantitative
easing. [ID:nLB316187]
 (Editing by Michael Watson)