* Yen, dollar up as investors cut risk exposure, shares fall
* Weak U.S. sales data underlines long road to econ recovery
* ECB policymaker comments underline divided policy views
* Yen hits 8-week high vs dlr, 2-week high vs euro
(Adds comment, updates prices, changes byline)
By Jessica Mortimer
LONDON, May 14 (Reuters) - The yen and the dollar rose
broadly on Thursday as investors reduced exposure to risk on
growing scepticism the global economy is on the road to
recovery.
Weak U.S. retail sales data on Wednesday reminded investors
that their recent optimism may have been a little premature and
pushed them towards those currencies perceived to be safe.
The yen outperformed, hitting an eight-week high against the
dollar, while gains for the greenback against most other
currencies pushed it higher on a trade-weighted basis.
Currencies seen as higher risk, such as the Australian
dollar and sterling, also fell broadly as European equities fell
0.2 percent.
"Risk aversion is very much back in the market," said Arne
Lohmann Rasmussen, head of FX research at Danske Markets in
Copenhagen.
"There is still a strong correlation between global equities
and currencies, and U.S. retail sales surprising on the downside
didn't help the mood," he said.
He added the perception that the "green shoots" of an
economic recovery are starting to wither has encouraged
profit-taking in riskier assets.
At 1155 GMT, the dollar was steady at 95.45 yen <JPY=>, not
far off an eight-week low of 95.12 yen hit earlier in the
session.
Traders said dollar/yen was testing both the 100-day and
21-week moving averages around 95.09 yen, while also pointing
out that around $1 billion in dollar/yen options around 95.00
yen are due to expire during the New York session.
The yen also gained on the crosses, with the euro down 0.2
percent at 129.55 yen <EURJPY=R>, having hit a two-week low of
128.89 yen, while the higher-yielding Australian dollar also
dropped to a two-week low of 71.12 yen <AUDJPY=R>.
Against the dollar, the euro fell 0.2 percent to $1.3568
<EUR=>, sterling lost 0.2 percent to $1.5114 <GBP=> and the
Aussie dollar was down 0.4 percent at $0.7495 <AUD=>.
This helped the dollar index rise 0.2 percent to 82.707
<.DXY>.
RECOVERY DOUBTS
In the absence of major euro zone data, investors continued
to focus on Wednesday's poor U.S. retail sales numbers, which
showed an unexpected 0.4 percent drop during April.
The news followed a report of diving euro zone industrial
output and a grim prognosis on the UK economic outlook in the
Bank of England's latest Inflation Report. [].
"There's volatility in viewpoints (about the economy) at the
moment, which is creating instability," said Marc Ostwald,
strategist at Monument Securities.
U.S. producer prices and weekly jobless claims are scheduled
for release at 1230 GMT.
The euro offered little reaction to comments from some
European Central Bank Governing Council members who offered
diverse views on the outlook for euro zone interest rates and
the economy during a conference in Vienna. []
ECB Governing Council member Ewald Nowotny said the ECB's
key interest rate -- which was cut by 25 basis points to 1.0
percent last week -- may eventually approach "the lower boundary
of zero". []
This contrasted with comments from his colleague Axel Weber,
who on Wednesday reiterated that very short-term interest rates
are now at an appropriate level.
ECB Vice President Lucas Papademos meanwhile expressed
optimism an economic recovery may come sooner than previously
envisaged, though Governing Council member Nout Wellink
cautioned against becoming too optimistic.
"If the disagreement between the doves and the hawks in the
ECB become more vocal, that will result in a downside for the
euro," said Lee Ferridge, vice president and senior macro
strategist at State Street in London.
(Reporting by Jessica Mortimer; additional reporting by
Naomi Tajitsu; editing by Chris Pizzey)
