* Dollar/yen, cross/yen regain some ground after sell-off
* Yen pressured as short-covering and profit-taking fade
* Dlr/yen support at 200-day MA near Y83.50, then Y83.30
* Euro supported by China's pledge to buy Spanish bonds
* Singapore MAS decision Thursday key for Asia FX - analyst
(Updates prices)
By Masayuki Kitano
SINGAPORE, April 13 (Reuters) - The yen slipped on Wednesday
as a bout of global risk reduction abated, with some market
players looking for fresh opportunities to put on bets against
the yen after having booked profits the previous day.
The yen fell against the dollar and dipped broadly on the
crosses, giving back some of the gains it made on Tuesday, when
it rallied broadly as short-covering gained steam.
Traders said a sell-off in global equities and commodities
coupled with an upgrade of the severity of Japan's nuclear
crisis had prompted investors to unwind some of the recent
one-way yen-funded carry trades, with extended positioning
having helped exacerbate the move.
"I don't think anyone is serious about buying yen at this
stage. They are covering shorts. It's just a question of
reducing positions," said Rob Ryan, FX strategist at BNP Paribas
in Singapore, referring to the yen's surge the previous day.
Indeed, the yen has quickly come back under pressure, with
the Australian dollar rising 1.2 percent to 88.26 yen
. The Aussie dollar regained some ground against the
yen after Tuesday's 1.8 percent slide, but still remained well
below a 2-1/2 year high just above 90 yen touched on Monday.
The yen has slid broadly over the past several weeks on
worries about the economic impact of a massive earthquake and
tsunami that hit northeast Japan on March 11, and on
strengthening market expectations that the Bank of Japan will
lag behind other central banks in raising interest rates.
Such expectations and subdued market volatility have helped
put the focus on the yen's appeal as a funding currency for
carry trades -- a tactic of selling low-yielding currencies to
fund investments in assets with higher yields.
The spike in risk reduction and position unwinding seen on
Tuesday across various markets seemed to lose momentum on
Wednesday, with MSCI's broad measure of Asia-Pacific shares
outside Japan rising 0.7 percent , clawing back
some ground after its 1.7 percent fall on Tuesday.
One event that could affect investor risk appetite is the
Monetary Authority of Singapore's policy decision on Thursday,
said Ryan of BNP Paribas.
Asian currencies could rise and support risk sentiment if
the MAS tightens monetary policy on Thursday, he said.
"We get further risk-on, we get further intervention
recycling into euros and Aussie is likely to benefit as well."
But Asian currencies may take a hit if the MAS holds off
from tightening monetary policy, Ryan said, adding that such an
outcome could cause investors to scale back expectations for
further currency appreciation in Asia.
"I think there is the potential for investors to look at
Asia and say, 'Is this the beginning of the end of the
tightening cycle in Asia?'," Ryan said.
Singapore is expected to tighten monetary policy on
Thursday, with the central bank either sanctioning a small,
immediate jump in the local dollar or signalling it will let
the currency rise at a faster pace over time, a poll of
economists by Reuters showed. []
DOLLAR SUPPORT NEAR Y83.50
The dollar rose 0.7 percent to 84.22 yen after having
slid more than 1.2 percent on Tuesday for its biggest one-day
percentage drop in four months.
The dollar bounced off support at its 200-day moving average
near 83.50 yen. More support lies at 83.34 yen, the 23.6 percent
retracement of the dollar's mid-March to April rally, and 83.30
yen, the dollar's March 11 intraday high.
Short-term resistance lies at 84.33 yen, the conversion line
on the daily Ichimoku chart, a form of Japanese technical
analysis widely used among market players.
"After they booked profits yesterday, positions held by
market players who had taken bets against the yen earlier are
now pretty square," the customer dealer said. "They are now
looking for the proper timing and catalyst to build yen-selling
positions again."
The euro last stood at 122.00 yen , up 0.8 percent
from late U.S. trade on Tuesday but well below an 11-month high
of 123.33 yen hit on Monday.
The euro rose 0.l percent against the dollar to $1.4486
, having touched a 15-month high of $1.4520 on Tuesday on
trading platform EBS.
The euro got a lift against the dollar on Tuesday after
Chinese Premier Wen Jiabao said China will carry on buying
Spanish sovereign bonds. []
(Additional reporting by Ian Chua in Sydney and; Reuters FX
analyst Rick Lloyd in Singapore; Editing by Kim Coghill)
