* Yen soft as U.S. data boosts investor confidence
* Dollar gains vs yen, sterling hits 6-month high
* U.S. debt sale also soothes concerns, though more to come
* U.S. housing data eyed
By Charlotte Cooper
TOKYO, May 27 (Reuters) - The yen fell on Wednesday as an
improvement in U.S. consumer confidence reinvigorated investor
interest in betting on riskier assets, including currencies seen
likely to benefit quickest from economic improvement.
Sterling climbed to a six-month high against the yen and
neared $1.60 <GBP=D4>, while the dollar also gained against the
Japanese currency, as did the euro and Australian dollar.
The dollar also received some support after a two-year U.S.
debt sale on Tuesday found solid demand, alleviating some worries
about investor appetite for ballooning U.S. debt, although two
more sales are lined up this week.
But riskier currency moves were not always uniform, with the
New Zealand dollar falling and the greenback recapturing some
lost ground from the Australian dollar.
"Risk buying appears to have returned somewhat after recent
moves to sell the dollar, as the U.S. Treasury auction, which
many were worried about, ended without problems," said Shinichi
Hayashi, a currency trader for Shinkin Central Bank.
"The dollar/yen will likely move upward, even slightly, if a
series of auctions that will continue this week passes without a
hitch. The currencies of resource-producing countries will also
likely be firm against the yen."
The U.S. Treasury sold $40 billion of debt on Tuesday and
sells another $61 billion this week. Bond yields rose after
Tuesday's sale, although part of that was due to a jump in stocks
after a rebound in U.S. consumer confidence. []
The consumer confidence index rose to 54.9, its highest in
eight months, boosting hopes of an economic rebound and lifting
stock markets in Asia as well as the United States.
[].
The dollar rose 0.4 percent to 95.42 yen <JPY=>. A trader at
a major Japanese bank said it hit buy orders near 95.20/30.
The euro gained 0.4 percent to 133.30 yen <EURJPY=R> while
sterling, which has risen 28 percent against the yen since late
January, touched its strongest level since November at 152.53 yen
<GBPJPY=R>, according to Reuters data.
Traders said the market is closely watching economic
indicators such as U.S. housing data. Figures for existing home
sales in April will be released on Wednesday, and new home sales
data for the same month come out on Thursday.
KIWI STRUGGLES
Commodity-related currencies, sterling and the euro have all
risen steadily against the yen and the dollar this year as
investors have unwound safe-haven positions on signs the global
economic crisis is abating.
But they are now facing significant psychological levels as
investors try to assess how far their rallies can go while
economic data the world over shows conditions have merely stopped
worsening but still remain far from positive.
The Australian dollar climbed 0.4 percent to 74.97 yen
<AUDJPY=R>, moving back within sight of this month's seven-month
high at 76.11 yen.
But it struggled to hold on to higher ground against the
dollar, turning down after brushing its highest in nearly eight
months at $0.7888 <AUD=D4>.
The New Zealand dollar also struggled, falling against the
dollar <NZD=D4> and the yen <NZDJPY=R>.
News that dairy export giant Fonterra Co-operative Group,
which generates more than 7 percent of New Zealand's gross
domestic product, expects to make a lower payout to farmers for
the 2009/10 dairy season weighed on the kiwi. []
New Zealand also unveils its annual budget on Thursday, with
concern weighing on the currency of a possible ratings downgrade
depending on what the budget delivers, said Su-Lin Ong, a senior
economist at RBC Capital Markets in Sydney.
The kiwi slipped 0.5 percent to $0.6214 <NZD=D4> and edged
down 0.1 percent to 59.20 yen <NZDJPY=R>.
The euro, which has risen about 10 percent in three months
and hit a four-month peak above $1.4050 last week, was back below
$1.40 on Wednesday to trade at $1.3955 <EUR=>.
The dollar was up 0.2 percent against a basket of six major
currencies <.DXY>, although it was still within sight of a
five-month low set on Friday.
Data showed Japan's exports fell 39.1 percent in April from a
year earlier, a slower pace than forecast or than in March,
adding to growing signs the worst of the global slump in trade
may be over. []
Japan's trade balance logged a surplus of 69.0 billion yen
($728.6 million), compared with expectations for a 57.5 billion
yen shortfall.
"It's another sign that the worst for Japanese exports is
over," said Takeshi Minami, chief economist at Norinchukin
Research Institute.
"But the global economy is still hurt, so a sharp rebound is
unlikely. For Japanese companies, severe conditions will
continue."
(Additional reporting by Aiko Hayashi and Rika Otsuka; Editing
by Michael Watson)
