* Yen rises vs dollar, Aussie, other majors after China GDP
* Yen fell before data on anticipation of more upbeat number
By Kaori Kaneko
TOKYO, April 16 (Reuters) - The yen jumped against the dollar
and other major currencies on Thursday after news that China's
economic growth slowed to its weakest on record, disappointing
players who had bought higher-yielding currencies in anticipation
of more upbeat numbers.
The yen had fallen earlier in the day as short-term
speculators bought commodity currencies such as the Australian
dollar ahead of the GDP announcement, expecting the figures would
outstrip forecasts in a positive signal for the global economy.
Low interest rates in Japan mean the yen has been used to
sell against higher-yielding currencies such as the Australian
dollar, where official rates are 3 percent and the economy is
expected to benefit from a pick-up in Chinese growth.
In the event, China's annual GDP growth slowed to 6.1 percent
in the first quarter from 6.8 percent in the final three months
of last year, prompting market players to reverse positions and
buy the yen back. []
"The data disappointed the market because there was talk that
China's GDP would be around 8 percent, which pushed currencies
such as the Australian dollar and sterling higher before the
data," said Masato Mori, a senior manager at NTT SmartTrade.
"With the global economy weak there had been hopes that
stronger-than-expected Chinese GDP would help pull it out of
recession," he said.
The dollar slipped 0.5 percent on the day to 98.88 yen <JPY=>
from 99.42 <JPY=> before the Chinese data, and well below a
six-month high of 101.45 set last week.
A trader at a European bank in Singapore said Japanese banks
had dollar/yen sell orders at 98.80/60 yen, which if triggered
could spark a further drop.
STILL QUICK TO PULL THE PLUG
The Australian dollar lost 0.6 percent to 71.81 yen
<AUDJPY=R> after climbing to 72.75 ahead of the Chinese data, and
fell 0.1 percent on the day to $0.7267 <AUD=D4>, while the
Canadian and New Zealand dollars also fell against the yen.
Masafumi Yamamoto, head of FX strategy at Royal Bank of
Scotland, said other data from China signalled the economy may be
through the worst and the currency market reaction had been
overdone, but investors remained extremely cautious and quick to
take profits or close positions.
He said the Australian dollar had been on a rising trend
against the yen for a while and short-term investors were trading
on trends rather than interest rate differentials. The Aussie has
gained about 26 percent on the yen since the start of February.
"People are just following the trends. Since April the trend
has been very strong," he said.
"But investors are very wary of risks and not convinced yet
that the economy has bottomed out," he said.
Sterling hit a three-month high of $1.5069 <GBP=D4> early in
the day after a report on Wednesday showed the pace of decline in
house prices in England and Wales moderated to its slowest in a
year. []
Dealers said buy orders were triggered as the pound went
through $1.5030/40, pushing the currency even higher. It later
stood 0.1 percent up at $1.5007 <GBP=D4>.
It fell 0.3 percent to 148.42 yen <GBPJP=R> from about 149.46
yen before the Chinese numbers were released.
The euro eased 0.2 percent to $1.3194 <EUR=>. Traders said
comments by an ECB official that the central bank would lay out a
package in May of non-traditional monetary policy measures to
boost the economy was likely to weigh on the currency.
[]
The market was also awaiting earnings reports from major U.S.
companies such as JPMorgan <JPM.N> on Thursday and Citigroup
<C.N> on Friday, traders said.
(Additional reporting by Charlotte Cooper; Editing by Michael
Watson)
