* Dollar climbs to 3-month high vs yen of 93.60
* Yen falls broadly, portfolio outflows expected
* Euro supported by month-end demand, fiscal woes linger
(Adds quote, updates prices)
By Neal Armstrong
LONDON, March 31 (Reuters) - The dollar hit a three-month
high versus the yen on Wednesday as investors sold the Japanese
currency broadly into the beginning of the new fiscal year.
Strong dollar demand from Japanese importers for financial
year-end book closing triggered widespread buying in Asian
trading, putting the pair's year highs in sight.
"The fiscal year-end is done and dusted and we are beginning
to see portfolio outflows from Japan which is putting the yen
under pressure," said HSBC's director of currency strategy Paul
Mackel.
Traders said Japanese banks, life insurers and hedge funds
were seen buying dollars as the greenback broke above the key 93
yen level, cancelling out Japanese exporters' dollar selling.
"We've seen a pick-up in dollars from Japanese investors,
who are seen increasing dollar-denominated assets on an unhedged
basis for the new fiscal year," said Lee Hardman, currency
economist at Bank of Tokyo-Mitsubishi UFJ in London.
By 1130 GMT, the dollar rose 0.6 percent at 93.42 yen
<JPY=>. It hit 93.60 yen on electronic trading platform EBS, its
highest since early January, which was also the next target at
93.78 yen, traders said.
The Japanese currency was under broad selling pressure,
slipping to a two-month low versus the euro and a five-week low
against the pound.
"We particularly like sterling against the yen and target a
move towards 149 yen," added HSBC's Mackel.
The euro rose more than 1 percent to 125.96 yen <EURJPY=R>,
as technical analysts noted the completion of a head-and-
shoulders reversal pattern which targets a move towards 131 yen.
EURO VULNERABLE
The single European currency held well above $1.34 <EUR=> as
traders said month-end fixing sales of dollars weighed on the
greenback.
But fiscal concerns in the euro zone lingered, and the
spread between Greek and German 10-year benchmark bonds widened
on Wednesday.
"Greece will still be a major concern for the euro," added
BTM's Hardman.
News that Ireland would take a bigger stake in the banking
sector than planned added to the air of uncertainty.
On the quarter, the euro was down 6.2 percent against the
dollar, on track for its biggest fall since Q3 2008.
The dollar index <.DXY> was down around 0.3 percent at
81.278, staying below a 10-month high of 82.240 hit last week.
It has risen almost 5 percent this quarter.
Ahead of the highly anticipated U.S. nonfarm payrolls data
due out on Friday, traders will watch the private sector ADP jobs
report for March due at 1215 GMT, with forecasts 40,000 jobs were
created against 20,000 lost in February. U.S. factory orders for
February are due at 1400 GMT.
The Australian dollar fell 0.2 percent to $0.9162 <AUD=>
after retail sales data came in lower than forecast, denting
expectations for a rate rise by Reserve Bank of Australia next
week.
(Additional reporting by Tamawa Desai; Editing by Toby
Chopra)
