* Yen up as investors cut bets on riskier assets
* Caution grows before U.S. earnings, long weekend
* Fed's Fisher says euro faces more problems than dollar
By Kaori Kaneko
TOKYO, April 8 (Reuters) - The yen rose broadly on Wednesday
as falls in share prices and worries about upcoming earnings
results for big U.S. companies prompted investors to sell
higher-yielding currencies.
The yen recovered from multimonth lows against major
currencies struck earlier this week when optimism that stimulus
efforts would eventually filter down to the global economy
encouraged investors to return to riskier assets.
Asian stocks slid for a second day on Wednesday with
investors fleeing to the sidelines to await companies' business
outlooks as what is expected to be a grim results season begins.
[]
The dollar was also higher on its perceived safety, although
lower against the yen, as caution grew after aluminium producer
Alcoa Inc <AA.N> kicked off the U.S. reporting season with a
quarterly loss and a source said General Motors Corp was in
intense preparations for bankruptcy. []
The U.S. and Japanese currencies, seen as safer bets than
others in times of market stress, will likely keep drawing demand
as investors stay away from higher-yielding currencies such as
the Aussie, dealers said.
"The currency market moved back to risk aversion after
optimism had gone a bit too far," said Yoshihisa Kanzaki, a
currency dealer at Shinkin Central Bank.
"But the market overall is expected to be driven by investor
position adjustments and profit-taking for the rest of this week
ahead of a long weekend for many overseas players and before U.S.
financial sector earnings," he said.
The dollar slipped 0.6 percent to 99.85 yen <JPY=>, off
Monday's high of 101.45 yen, the highest since late October.
The euro dropped 1.3 percent to 131.60 yen <EURJPY=R>,
retreating further from a six-month high of 137.42 yen touched on
Monday on trading platform EBS.
The dollar index, a gauge of the greenback's performance
against six major currencies, gained 0.4 percent to 85.610
<.DXY>.
The euro fell 0.6 percent to $1.3175 <EUR=>.
Data showing Japan's current account surplus halved in
February from a year earlier had little impact on the market, but
some traders used the figures an excuse to buy back the yen as
the surplus shrank slightly less than expected, analysts said.
[]
"The data shows Japan's economy continues to deteriorate. But
for the yen, returning to a surplus is a positive, because
foreign investors saw last month's deficit as a reason to sell
the yen," said Toru Umemoto, chief foreign exchange strategist at
Barclays Capital in Japan.
EURO UNDER DOWNWARD PRESSURE
The European single currency came under selling pressure
after data showed the euro zone economy recorded its deepest-ever
quarterly fall in the fourth quarter of 2008. []
The euro extended its falls against the yen and the dollar
after Dallas Fed president Richard Fisher said the euro was
facing even more problems than the U.S. currency. []
Traders said Ireland's second emergency budget in six months
was also weighing on the euro, highlighting strains in the euro
zone.
Ireland unveiled on Tuesday an emergency budget including
harsh spending cuts and tax hikes, and it is expected to face a
significant increase in gross national debt to finance a new
agency to buy soured bank loans. [] []
Higher-yielding currencies such as the Australian dollar and
the New Zealand dollar fell.
The Aussie dropped 0.8 percent to $0.7059 <AUD=D4> and
declined 1.4 percent to 70.43 yen <AUDJPY=R>.
The kiwi was down 0.6 percent at $0.5720 <NZD=D4> and dropped
1.3 percent to 57.11 yen <NZDJPY=R>.
(Additional reporting by Satomi Noguchi; Editing by Chris
Gallagher)
