* Yen trims losses to be near 5-week high vs dlr
* Report of Goldman Sachs losses revives risk aversion
* Aussie falls after RBA cuts rates by 100 basis points
By Satomi Noguchi
TOKYO, Dec 2 (Reuters) - The yen trimmed losses on Tuesday to
trade near a five-week high, as stocks worldwide slid on a
increasing economic gloom and after a report on possible net
losses at Goldman Sachs Group <GS.N> revived risk aversion.
The yen had been under pressure earlier from domestic
investors, which traders attributed to a trimming of speculative
bets against the dollar.
"Investors covered their short positions accumulated since
last week. But they basically remain risk averse and there is a
possibility that the yen will resume its rally if U.S. stocks
continue to fall," said Kwanga-ja Kim, deputy general manager at
Shinsei Bank.
The dollar was nearly flat at 93.19 yen <JPY=>, after rising
to the day's high of 93.83 yen from a five-week low of 92.87 yen
on trading platform EBS.
Caution grew after the Wall Street Journal reported that
Goldman Sachs, known for having avoided much of the damage that
has battered its Wall Street rivals, is likely to report net
losses of as much as $2 billion for its latest quarter.
Market players said that the yen was likely to continue to
find support as risk appetite was low in the wake of recent data
underscoring the weakness of economic fundamentals worldwide.
Manufacturing data in the United States fell in November to
its weakest since the 1981-1982 recession. []
The U.S. economy was also confirmed to have fallen into a
recession nearly a year ago and Federal Reserve Chairman Ben
Bernanke said the central bank is mulling extreme policy measures
such as buying more government bonds to revive growth.
[]
The Nikkei share average <> dropped 6 percent with
stocks in Hong Kong <> and Taiwan also falling about 5
percent at one stage <>.
Moves in equities are seen as a barometer of investor risk
appetite, and stock falls can lead to the unwinding of carry
trades, in which investors sell low-yielding currencies like the
yen to invest in higher-yielding currencies and assets.
The euro was little changed at 117.60 yen <EURJPY=R>, after
rebounding as high as 118.53 yen from the day's low of 117.23
yen. Against the dollar, the euro rose 0.1 percent to $1.2620
<EUR=>.
"The trend for stronger yen is intact as the economic
downturn could be even deeper ahead into the New Year," said a
manager at a Japanese trust bank.
"We see euro/yen falling towards 110 yen at the end of this
month and eventually to 100 yen," the manager said.
The Australian dollar fell in volatile trade after the
Australian central bank lowered interest rates by 100 basis
points to 4.25 percent, broadly in line with prior market
expectations.
The Australian dollar was down 0.5 percent at $0.6369
<AUD=D4>. It had rebounded above $0.64 briefly after the decision.
Market players have now shifted their focus to rate decisions
from The Bank of England, the European Central Bank and the
Reserve Bank of New Zealand later this week.
The Bank of Japan held an emergency policy meeting and
announced the central bank will accept wider range of corporate
debt as collateral in money market operations to help ease a
squeeze in credit markets.[]
The BOJ held interest rates steady as expected at the
meeting, which will be followed by news conference comments from
Governor Masaaki Shirakawa, due for release around 0700 GMT.
(Additional reporting by Kaori Kaneko and Masayuki Kitano;
Editing by Edwina Gibbs)
