* Yen edges off 3-yr peak vs euro, 6-yr peak vs Aussie
* Nikkei falls 0.8 pct, other Asian bourses climb
* U.S. considers UK-style bank stake plan
* Market eyes G7 for more action after coordinated rate cuts
By Chikako Mogi
TOKYO, Oct 9 (Reuters) - The yen edged off a three-year peak
against the euro on Thursday after coordinated global interest
rate cuts gave a slight boost to some battered Asian stock
markets and helped improve investor appetite for risk.
But market players were cautious about how sustainable any
improvement is after the panic that has gripped financial markets
around the world this week, sparking a sharp sell-off in stocks,
higher-yielding currencies and commodities.
The Federal Reserve, the European Central Bank, the Bank of
England and Switzerland, Canada and Sweden all slashed official
rates by a half-percentage point on Wednesday to stem the worst
global financial crisis since the 1930s. []
Even after the rate cuts, money markets remained all but
frozen as market players looked for more concerted efforts, such
as a central bank guarantee on interbank lending, to help relieve
the troubles at the heart of the crisis.
Any such action may come after Group of Seven powers meet in
coming days.
"The coordinated rate cuts have failed to ease tightness in
the money markets, thus proving ineffective in resolving the
credit crisis or removing fears about the global economy," said
Hiroshi Yoshida, a trader at Shinkin Central Bank.
"Until these fears subside, investors will not take risks and
the pessimistic sentiment will benefit the yen," he said.
The U.S. Treasury Department is considering taking ownership
stakes in many banks to try to restore confidence, the New York
Times reported on its Web site on Thursday, quoting government
officials. []
The Bush administration said U.S. Treasury Secretary Henry
Paulson may discuss a plan floated by British Prime Minister
Gordon Brown for concerted action to guarantee interbank lending.
The dollar rose 1.3 percent from late U.S. trade to 100.51
yen <JPY=>, rebounding from a six-month low of 98.60 yen hit on
trading platform EBS on Wednesday.
The euro also recovered against the yen, up 1.5 percent at
137.12 yen <EURJPY=R>, after falling to a three-year low of
134.15 yen on Wednesday.
The euro inched up 0.1 percent to $1.3645 <EUR=>.
Traders expect investors still remain averse to risk to the
benefit of the yen.
The yen has surged as investors have dumped carry trades in
which they had used the low-yielding Japanese currency as a
source of funds for buying higher-yielding currencies such as the
Australian dollar.
The yen has also benefited because Japanese banks have
suffered little from the credit crisis and the yen tends to serve
as a safe-have currency due to Japan's current account surplus.
Asian stocks were choppy on Thursday. The Nikkei <>
dipped 0.8 percent after rising 2 percent at one point. On
Wednesday the Nikkei plunged 9.4 percent, the biggest one-day
drop since the 1987 stock market crash.
Equity markets in Seoul and Hong Kong posted gains.
[]
"The yen remains firm overall and looks set to stay strong
given that market players see the coordinated rate cuts as too
little, too late to fend off a credit crisis," said a senior
trader at a European bank.
The Aussie rose 4 percent against the yen to 68.97 <AUDJPY=R>
but was still down 14 percent this week and hit a six-year low of
63.65 yen. The Aussie was up about 3 percent against the U.S.
dollar at $0.6868 <AUD=D4> after falling to a five-year low of
$0.6436.
G7 officials will meet starting later on Thursday before the
annual meetings of the International Monetary Fund and World Bank
in Washington. Japan said it expects the G7 to send a strong
message on stabilising the global financial system.
"The cuts may have had a psychological effect, but this isn't
a fundamental solution to the credit crisis. Stocks will likely
fall further, boosting the yen on risk aversion," a trader at a
Japanese brokerage said.
(Editing by Sophie Hardach)
