* Risk appetite rises as Asian stocks gain on economic hopes
* Signs of yen carry trade creeping back - analyst
* Little impact from North Korea rocket launch
By Satomi Noguchi
TOKYO, April 6 (Reuters) - The yen hit its lowest levels in
nearly six months against the dollar and the euro on Monday as
investors' risk appetite grew, with Asian stocks climbing on
hopes the global downturn may be nearing its bottom.
Traders said a recovery in emerging market assets, buoyed by
G20 steps to help developing economies last week, added to
investors' appetite for riskier and higher-yielding currencies
such as the Australian and New Zealand dollars.
"The yen seems to be becoming the easiest to secure in the
market now, compared with the dollar and euro. A move may be
emerging in which speculators use the yen to fund investments in
other currencies and assets," said Mitsuru Saito, chief economist
at Tokai Tokyo Securities.
"We can probably say a mini yen carry trade is back," Saito
said.
Carry trades are when investors sell a low-yielding currency
to buy higher-yielding assets and they were hugely popular among
Japanese retail investors earlier in the decade.
Part of the Japanese currency's rally as the global financial
crisis escalated last year was driven by buying back of yen used
in such trades as investors exited positions in riskier
investments.
But analysts say Japanese retail investors are not returning
to the trade en masse just yet as the economic environment still
holds plenty of uncertainties.
The dollar rose as far as 100.93 yen on trading platform EBS,
its highest since Oct. 21, before edging back to 100.72 yen
<JPY=>, up 0.4 percent from Friday.
A move just above 101.00 would be technically significant as
it would be a 38.2 percent Fibonacci retracement of its decline
from a peak in 2007 to its 13-year low in January.
The euro <EURJPY=R> reached 137.05 yen on EBS, the highest
since Oct. 20, before retreating to 135.54 yen, up 1 percent.
One trader said part of the reason for the yen's sharp drop
was a sense in the market that some central banks may be near
bottom in the rate-cutting cycle after investors sensed strong
hesitation in the European Central Bank last week when it set
rates at a record low but with a smaller cut than expected.
The Reserve Bank of Australia is expected to cut rates when
it holds its monthly policy meeting on Tuesday but the decision
is seen as a close call, with a Reuters poll on Friday showing 13
of 21 analysts expecting no change. []
DOLLAR ALSO TAKES A STEP BACK
North Korea's launch of a rocket that passed over Japan on
Sunday provoked international outrage but traders said the impact
on financial markets in the region was limited as the outcome was
largely in line with expectations. []
"The market is continuing its trend to sell the yen on higher
share prices, while a recovery in emerging markets is encouraging
market players to buy higher-yielding currencies against the
yen," said a trader at a Japanese bank.
The dollar also faced selling pressure, except against the
yen, as views that the U.S. economy may have found a bottom led
investors to reduce holdings of the greenback as a safe haven.
But some analysts warn hopes of an economic recovery may be
premature, with the run-up in stocks merely a bear market rally.
Data on Friday showed the U.S. economy lost 663,000 jobs in
March but investors took the figure as less dire than many had
feared and it did little to dampen improved risk appetite.
[]
The dollar index, a gauge of the greenback's performance
against six major currencies, fell 0.4 percent to 83.823 <.DXY>.
The euro gained 0.6 percent to $1.3568 <EUR=>.
Sterling rose above $1.4900 <GBP=D4> to its highest in two
months, driven by gains against the yen and up 0.6 percent on the
day. It climbed as high as 150.82 yen <GBPJPY=R>, a five-month
peak, after piercing technical resistance just above 150.00.
The New Zealand dollar jumped more than 2 percent at one
stage to a five-month high above 60 yen <NZDJPY=R>, and the
Australian dollar gained 1.3 percent to a six-month peak of 72.74
yen <AUDJPY=R>, according to Reuters data.
(Additional reporting by Yoshiko Mori and Charlotte Cooper,
editing by Chris Gallagher)
