* China data underlines strong growth momentum, boosts Aussie
* Yen supported by talk of repatriation flows
* Euro, pound subdued on fiscal worries
By Satomi Noguchi
TOKYO, March 10 (Reuters) - The yen held firm on Wednesday on
expectations of a pick up in Japanese repatriation flows before
the end of the financial year, while the Australian dollar was
boosted by strong Chinese trade data.
Traders said Japanese exporters have sold the euro and the
dollar this week, repatriating some of their overseas earnings in
the run-up to the fiscal year-end on March 31.
But yen gains were limited by speculation that the Bank of
Japan may take additional steps to ease monetary policy as it
remains under government pressure to help pull the country out of
grinding deflation.
Data showed on Wednesday that Chinese exports and imports
surged past expectations in February, underscoring the strong
momentum in the world's third-largest economy. []
Commodity-linked currencies rose after the release of the
Chinese economic report, with the Australian dollar climbing to a
seven-week high against the U.S. dollar.
"Investors bought the Aussie, thinking the Australian economy
will continue to grow as it should benefit from a robust growth
in China, Australia's biggest trade partner," said Tsutomu Soma,
senior manager of the foreign securities department at Okasan
Securities.
The Australian dollar rose as far as $0.9164 <AUD=D4>, its
highest since Jan. 20, according to Reuters data. It then,
slipped back to $0.9157, up 0.1 percent on the day. Some traders
said stops were lined up at $0.9180.
The dollar <JPY=> was steady around 90 yen, having lost over
0.3 percent on Tuesday. Support for the greenback is seen around
the 89.30 yen level, which forms the base of the Ichimoku cloud.
The euro also drifted sideways around 122.40 <EURJPY=R>,
having lost nearly 0.6 percent on Tuesday.
The BOJ is likely to debate easing its ultra-loose monetary
policy again at its board meeting on March 16-17, after
introducing a new funding operation in December under a previous
wave of government pressure as the yen climbed versus the dollar.
[]
After the BOJ adopted a new fund-supply operation in December
in the wake of the yen's climb to a 14-year high of 84.82 yen,
the Japanese currency fell as far as 93.78 yen against the dollar
in early January. But it later resumed rising, advancing as much
as 88.14 yen last week.
"The biggest risk for the yen is that the BOJ offers nothing
new at the end of its meeting next week. That could send the yen
higher on disappointment," said the sales trader at a Japanese
bank.
The New Zealand dollar <NZD=D4> rose 0.5 percent to $0.7064,
after striking a three-week high at $0.7069 on the Chinese trade
data.
The euro and the pound were subdued on fresh worries about
Europe's fiscal health. The euro <EUR=> eased 0.1 percent against
the U.S. dollar, trading around $1.3590.
The common currency had come under fresh pressure after the
Fitch ratings agency said it still has a negative outlook on
Portugal's credit rating. []
That fed concerns that peripheral euro zone economies may
face debt problems similar to those of Greece, where a fiscal
crisis has led investors to flee the euro in past weeks.
The pound <GBP=D4> was struggling below $1.5000, having been
hit by weak data, and fears around Britain's sovereign rating as
well as the credit ratings of its banks.
Sterling has lost more than 7 percent this year on concerns
Britain will be stuck in political deadlock after the May
election.
(Additional Reporting by Anirban Nag in Sydney and Rika Otsuka
in Tokyo; Editing by Joseph Radford)
