* Yen rebounds as stock markets turn down
* U.S. corporate earnings eyed
* Aussie touches 6-month high vs yen
By Shinichi Saoshiro
TOKYO, April 14 (Reuters) - The yen pared earlier losses and
gained broadly on Tuesday, as investor appetite for risk was put
on hold following a slide in stock prices.
But analysts said the yen's respite could be cut short if
share markets were to be cheered by U.S. corporate results due
later in the day.
Stock market swings have recently been a dominant driver of
the currency market, with expectations for a global economic
recovery enhancing demand for assets such as equities and
commodity currencies like the Australian dollar.
Tokyo's Nikkei stock average <> shed 1.1 percent and
U.S. stock futures <SPc1> fell 0.9 percent, providing support for
the yen.
Market participants said Tuesday's moves were dominated by
short-term incentives with the focus on upcoming corporate
earnings releases.
"It was a good chance for speculators to take profits and
adjust positions after the yen's counterparts gained
significantly," said a trader at a Japanese bank.
"The yen still lacks longer-term support with most eyes on
earnings results from the United States," the trader said.
Closely watched results due later in the day include those of
Intel <INTC.O> and Johnson & Johnson <JNJ>. The market was also
awaiting March U.S. retails sales data for any signs of recovery
in consumer spending.
The dollar dropped 0.3 percent from late U.S. trade the
previous day to 99.76 yen after climbing to 100.43 <JPY=>.
The euro lost 0.3 percent to 133.30 yen <EURJPY=R> after
hitting 134.33 on trading platform EBS. The euro was little
changed at $1.3362 <EUR=>.
The Australian dollar rose as far as 73.49 yen <AUDJPY=R>,
its highest since mid-October, before slipping to 72.75 yen, down
0.5 percent.
The New Zealand dollar <NZDJPY=R> fell 0.3 percent to 58.97
yen.
Markets are also waiting to see how U.S. banks fared in the
first quarter, looking for signs the financial sector may be
starting to stabilise after news that Goldman Sachs <GS.N> posted
a higher-than-expected $1.7 bln profit helped lift sentiment.
[]
Any lift in sentiment towards the financial sector is being
eyed to boost the stock markets.
Currency pairs such as the Australian and New Zealand dollars
against the yen have shown a high positive correlation with U.S
share markets in recent months, and analysts say that is partly
behind the yen's fall.
"The market is playing that correlation between equities and
FX in an environment where yields everywhere are converging and
people are getting some yield back into their portfolio - and
cross/yen is where to play it," said Sue Trinh, senior currency
strategist at RBC Capital Markets in Sydney.
The U.S financial markets had made an upbeat return to
business on Monday after the long weekend, driving the dollar and
yen down and sending the euro and the Australian and New Zealand
dollars up, with optimism about China's recovery prospects
helping the commodity currencies.
Still, analysts caution the improvement in investor
confidence is simply a reduction in the extreme pessimism seen at
the height of the global economic crisis and sentiment remains
fragile.
Optimism about banks was partly offset on Monday by a profit
warning from Boeing <BA.N> and worries about automaker General
Motors <GM.N>. []
U.S. President Barack Obama plans to deliver what the White
House called a "major" speech on the economy on Tuesday.
Obama said on Monday that thousands of major infrastructure
projects being undertaken as part of his economic stimulus plan
were ahead of schedule and under budget. []
Singapore's central bank on Tuesday eased monetary policy for
the second time since 2003 by effectively devaluing the Singapore
dollar as its government forecast a record economic contraction
this year. []
The Australian dollar lost 0.2 percent to $0.7293 <AUD=D4>
and the New Zealand dollar <NZD=D4> fell 0.1 percent to $0.5911.
(Additional reporting by Charlotte Cooper; Editing by Chris
Gallagher)
