* Yen falls broadly as Asian shares rise
* Dollar loses ground vs Europeans, higher yielders
* G7 seen unlikely to issue strong message on currencies
By Charlotte Cooper
TOKYO, Feb 13 (Reuters) - The yen and the dollar fell broadly
on Friday as regional stock markets rose on hopes for a U.S.
government programme to subsidise mortgages and as investors
readied for a Group of Seven finance officials meeting.
The yen, which tends to fluctuate based on perceived shifts
in investors' risk appetite, lost ground to the euro and higher
yielding currencies as Asian equities rose, with Japan's
benchmark Nikkei share average gaining 1 percent <>.
Analysts said the market had been buying yen for a while and
with stock markets broadly steady this week, investors were
closing some of those positions ahead of the G7 meeting on Friday
and Saturday, and a long weekend in the United States.
"Equity markets have been relatively stable, we haven't seen
significant breaks on the downside irrespective of the fact that
markets are not too thrilled with all the bailout plans," said
Sharada Selvanathan, currency strategist at BNP Paribas in Hong
Kong.
"What we're seeing is basically exhaustion technically and
the market itself thinking maybe it needs to adjust some
positions before carrying on with the trend."
The euro rose 0.4 percent to $1.2914 <EUR=> and climbed 0.4
percent to 117.53 yen <EURJPY=R>.
The dollar rose against the yen in late U.S. trading on
Thursday as U.S. stocks came off session lows after sources told
Reuters the Obama administration was hammering out a programme to
subsidise mortgages. []
But it failed to push higher on Friday amid talk of selling
by Japanese exporters, and traded steady at 90.97 yen <JPY=>.
It also lost ground to sterling <GBP=> and the New Zealand
dollar <NZD=>.
G7 RISK
Few expected the G7 finance officials meeting in Rome would
issue a strong message on currencies in general or the yen in
particular.
Even though the yen touched its highest in more than 13 years
against the dollar in January, at 87.10 per dollar, it has
retreated from that level and stabilised for now.
Japanese Finance Minister Shoichi Nakagawa said the G7
officials would confirm their anti-protectionist stance, but
currency issues would take a back seat. [].
"Few market players are expecting the G7 to come out with a
strong message on the yen," said Masafumi Yamamoto, head of
foreign exchange strategy for Japan at the Royal Bank of
Scotland.
The G7 issued an unusual statement in late October expressing
concern about excessive volatility in the yen.
But analysts said it would be no surprise if the ministers
made no explicit mention of the yen in a post-meeting statement
as the currency was not rising as it had been in October.
"There's no expected implication from the G7 on the currency
side," said ToruUmemoto, chief FX strategist for Japan at
Barclays Capital.
"But it is the G7 and the market is likely to feel
uncomfortable in keeping a position into the G7."
The Australian dollar bounced 0.8 percent to $0.6582 <AUD=D4>
and 59.91 yen <AUDJPY=R> after Australia's parliament passed a
$27.4 billion stimulus package, raising hopes the country could
avoid recession helped by a cash-hand to support consumption.
[].
(Additional reporting by Masayuki Kitano, editing by Chris
Gallagher)
