* Demand for yen, Swiss franc stalls as stock markets bounce
* Analysts expect economic weakness to underpin safe havens
* Traders await Bernanke speech at Fed gathering
(Releads, adds comment, updates prices)
By Neal Armstrong
LONDON, Aug 26 (Reuters) - A rally in safe-haven currencies
such as the yen and the Swiss franc stalled on Thursday as
global share prices bounced, although worries about the global
economy slowing down were likely to keep them supported.
The yen was also weighed down by speculation Bank of Japan
Governor Masaaki Shirakawa might comment on the yen or monetary
policy at a Federal Reserve retreat later this week.
European shares <> rose 0.6 percent, clawing back from
a five-week low on forecast-beating results and tracking a rise
in U.S. and Asian markets. But analysts said the better
sentiment was unlikely to be sustained.
"I would expect weaker economic activity to catch up with
stock markets and demand for currencies such as the Swiss franc
and the yen to continue," said Chris Turner, head of FX strategy
at ING.
Increasing concerns in the past few months about a global
economic slowdown have pushed the yen and Swiss franc higher due
to their perceived safe-haven status. The euro hovered near an
all-time low versus the Swiss franc hit on Wednesday <EURCHF=R>.
At 1142 GMT, the euro <EUR=> traded with gains of around 0.2
percent versus the yen <EURJPY=R> at 107.23 yen, having made a
brief show above 108 yen earlier on a bounce in European stocks
<>. The euro hit a nine-year low on Tuesday at 105.44 yen.
Against the Swiss franc, the euro was steady at 1.3035
francs <EURCHF=>, hovering near an all-time low hit on Wednesday
under 1.3000.
The euro hit a session high against the dollar <EUR=> of
$1.2746 before pulling back to around $1.2695. It hovered above
a six-week trough hit earlier in the week.
Gains in the euro helped push the dollar <.DXY> down 0.3
percent against a currency basket.
The euro flirted with its 55-day and 100-day moving averages
at $1.2713 and $1.2737 respectively. A close above these levels
would add to upward momentum.
High-yielding currencies such as the Australian dollar and
the New Zealand dollar outperformed the euro, aided by the
bounce in equities.
The dollar was steady versus the yen <JPY=> at 84.50 yen.
Earlier this week it hit a 15-year low of 83.58 yen as
investors tested whether Japanese authorities would go beyond
trying to talk down the yen.
JACKSON HOLE
Traders said the market was well contained on caution about
possible Japanese intervention, while many investors remained on
the sideline.
The BOJ saying Shirakawa will attend the Kansas City Federal
Reserve conference in Jackson Hole this week has made some
players hesitant to push the yen higher. []
"Shirakawa is likely to speak to (Federal Reserve Chairman
Ben) Bernanke and other central bankers in Jackson Hole, and
that is prompting market players to speculate about possible
Japanese action," said Hideki Amikura, deputy general manager of
the forex section at Nomura Trust and Banking in Tokyo.
Speculation has grown that Japan may intervene to stem the
yen's rise for the first time since March 2004. It hit an
all-time high of 79.75 to the dollar in 1995.
Bernanke will speak in Jackson Hole on Friday, and is likely
to signal his views about the U.S. economy, but analysts say he
is unlikely to offer clues to the Fed's policy outlook.
(Additional reporting by Naomi Tajitsu)
