* Low-yielding yen slips on renewed global appetite for risk
* Political uncertainty in Japan also weighing
* Euro/dollar <EUR=> hemmed in by option expiries
(Changes lead, byline, adds detail)
By Neal Armstrong
LONDON, June 3 (Reuters) - The yen fell against its major
rivals on Thursday amid renewed appetite for risk in global
markets, with political uncertainty in Japan also weighing on
the currency.
Speculation that there would be a strong reading of U.S.
jobs data due on Friday prompted demand for riskier currencies,
pushing the Australian and New Zealand dollars higher. Investors
tend to sell the low-yielding yen to fund such investments.
"Financial market conditions have stabilised in the
near-term. There's renewed risk-taking and that leads to a
weaker yen," said Lee Hardman, currency analyst at BTM-UFJ.
At 1115 GMT, the dollar was trading with gains of around 0.5
percent versus the yen <JPY=> at 92.65 yen. The euro <EURJPY=R>
also held gains of around 0.5 pct versus the Japanese currency
at 113.50 yen having earlier rallied above 114.00.
Stock markets around the world have been stabilising after
deep losses last month on concerns about Greece's debt woes.
European shares <> rose 1.8 percent, pulling further
away from a nine-month low hit last week.
"Equity markets are looking better today," said Marcus
Hettinger, global currency strategist at Credit Suisse in
Zurich. "At least for today, we're seeing some stabilisation in
risk appetite."
Traders also took speculation that Japan's next prime
minister would take a tougher stance in fighting the yen's
strength as an opportunity to trim long positions in the
currency.
Finance minister and candidate for ruling party head -- and
hence the premiership -- Naoto Kan surprised markets earlier
this year by saying that he wanted the yen to weaken more and
that most businesses were in favour of a dollar/yen rate around
95 yen.
"Political uncertainty in Japan is also weighing on the yen
in the short-term," added BTM-UFJ's Hardman.
The euro traded close to flat versus the dollar <EUR=> at
$1.2250, slipping from day's high of $1.2326 as traders said
option expiries at $1.2300 and $1.2200 were set to contain price
action into the 1400GMT New York expiry time.
The single currency has found its footing after sliding as
low as $1.2110 on Tuesday, its weakest in more than four years.
The Australian dollar <AUD=D4> rallied 0.8 percent versus
the U.S. dollar to $0.8478. with the New Zealand dollar <NZD=D4>
gaining around 0.5 percent against the greenback at $0.6850.
The dollar was also trading close to unchanged versus a
basket of currencies <.DXY> at 86.776.
PAYROLLS EXPECTATIONS
Investors took heart from U.S. data on Wednesday, which
showed surprisingly strong pending home sales for April and a
jump in May auto sales. []
Expectations of a strong U.S. payrolls report on Friday also
helped to whet the market's appetite for riskier assets. A
Reuters poll shows 513,000 jobs were created in May.
[]
Some economists are anticipating an even stronger figure,
with BNP Paribas upgrading its forecast to +615,000, while U.S.
President Barack Obama also added to optimism, saying on
Wednesday the report would show strong growth []
But given such lofty expectations, analysts at Paribas said
caution would be required going into the data given the heavy
bullish positioning.
"The market may be setting itself up for some near-term
volatility with the risk that investors are becoming overly
bullish on the labour market report with a 'buy the rumour sell
the fact' scenario appearing to build," they said in a note.
(Additional reporting by Naomi Tajitsu, editing by Patrick
Graham)
