* Yen hovers near week's lows as profit-taking subsides
* Market tilts in favour of more risk tolerance
* Nikkei rises but U.S. stocks futures slip
* Next week's U.S. economic data, including GDP, awaited
By Kaori Kaneko
TOKYO, July 24 (Reuters) - The yen hovered close to the
week's lows on Friday, losing its grip on early gains as
profit-taking on rallies in other majors subsided.
The yen hit its lowest in more than two weeks against the
dollar on Thursday and a three-week low against the euro as the
Dow industrials average <> topped the key 9,000 mark for the
first time since January and as traders in Asia sold yen in
anticipation of outflows from Japanese investors. []
Investors cashed in their euro and dollar gains early in the
Asian session on Friday, also prompted by disappointment that
investment trust flows out of Japan were smaller than expected,
and the yen clawed back some ground.
But by late Asian trade it was beginning to slip once more.
"The risk money is moving around because stock markets are
doing well. At this point people are now in a position to take
more risks, that's why people are buying yen crosses," said
Tsutomu Soma, a senior manager of foreign securities at Okasan
Securities.
The euro was steady on the day at 134.42 yen <EURJPY=R> after
slipping below 134.00 earlier in the day.
The dollar was down just 0.1 percent to 94.81 yen <JPY=>,
after touching 95.30 yen on trading platform EBS on Thursday, its
highest in more two weeks.
The yen's fall on Thursday was also partly due to
options-related selling against the Australian dollar, while
stop-loss sell orders triggered against other major currencies as
the yen fell were also a factor.
Nomura Asset Management and UBS were scheduled to launch
Japanese investment trusts focusing on foreign assets on Friday
and they were being closely watched to gauge likely selling
pressure on the yen.
The Nomura Asset Management investment trust has a
subscription ceiling of 100 billion yen ($1.1 billion) and will
focus on emerging market stocks. Industry sources said the
investment trust will likely total more than 70 billion yen.
UBS's mutual funds will invest in global bonds and attracted
about 21.9 billion yen in total, according to data collected by
Reuters. That was well below a subscription ceiling set at 1.2
trillion yen.
Of the currencies on offer, the Brazilian real proved the
most popular, drawing about 17 billion yen, while the Australian
dollar attracted about 2.1 billion yen.
The Aussie dollar was a popular trade against the dollar and
yen earlier in the year as stocks rallied and investors put money
back to work.
It rose 0.2 percent to $0.8152 <AUD=D4> on Friday, not that
far off this year's peak of $0.8265 set in June, and clawed back
ground against the yen to stand unchanged on the day at 77.22 yen
<AUDJPY=R> after climbing 1 percent on Thursday.
Traders said market sentiment was positive, although some
currencies are close to testing highs set in June, making
investors wary of pressing ahead too aggressively.
Tokyo's Nikkei share average <> rose 1.6 percent but
U.S. stocks futures were lower after Microsoft Corp <MSFT.O>,
Amazon.com Inc <AMZN.O> and American Express <AXP.N> posted
disappointing quarterly results after the bell on Thursday.
Some analysts said the upbeat sentiment which has supported
the likes of the Australian dollar and the euro against the yen
this week was likely to remain in the coming week.
But others said U.S. gross domestic product for the second
quarter due next week would be a focus to see how private
consumption is performing, and trading volumes could be thin in
coming weeks during the northern hemisphere summer vacation
season, making price action choppy.
"There's a possibility that the yen will become stronger
toward the end of next week, with pessimism probably resurfacing
as U.S. GDP data on Friday is likely to remain weak," said
Daisuke Uno, chief strategist at Sumitomo Mitsui Banking Corp.
"Also, the overall impression of the U.S. earnings seasons as
it winds down is that earnings have been helped by cost cuts but
sales still haven't really picked up."
The euro edged up 0.3 percent to $1.4179 <EUR=> after hitting
a seven-week high of $1.4292 on trading platform EBS the previous
day.
(Additional reporting by Satomi Noguchi, Aiko Hayashi; Editing
by Joseph Radford)
