* Cross/yen falls as exporters sell dollar/yen, euro/yen
* Jakarta blasts send rupiah down
* Market looking ahead to U.S. bank earnings
By Charlotte Cooper
TOKYO, July 17 (Reuters) - The yen rose broadly on Friday,
sending higher-yielding currencies lower, as Japanese exporters
sold foreign currency and as explosions in hotels in Jakarta and
caution before more U.S. bank earnings hurt risk appetite.
The Indonesian rupiah <IDR=> fell 1 percent to 10,230 to the
U.S. dollar after news that explosions at two Jakarta hotels
killed nine people, but pared early losses as state-controlled
banks stepped in to support the currency, traders said.
[] []
Majors such as the euro and Australian dollar, which has been
bought as a risk and recovery trade against the low-yielding yen,
were already falling in early Asian business after failing to
best peaks set on Wednesday, and traders said Japanese exporters
were selling.
With U.S. earnings still coming out and bank results due
later, analysts and traders said appetite for risk had already
started waning earlier in the session and they were divided on
whether the Jakarta blasts had affected major currencies.
"The blasts have added to this direction in terms of risk
trades coming off," said Mitul Kotecha, head of FX strategy at
Calyon in Hong Kong, but added it wasn't a big move.
The euro was down 0.5 percent on the day at 132.27 yen
<EURJPY=R>, above the day's low at 131.88 yen set after news of
the blasts but below Wednesday's one-week high of 133.40.
The Australian dollar fell 0.5 percent to $0.8000 <AUD=D4>
and 0.8 percent to 74.91 yen <AUDJPY=R>, after dipping as far as
74.69 yen.
The dollar eased 0.3 percent to 93.66 yen <JPY=>.
"Some exporters who had been aiming to secure a dollar/yen
rate of 100 yen and euro/yen of above 135 yen have brought down
their sell orders," said a trader for a major Japanese bank.
It was not clear why exporters decided to bring down their
offers at this point, he said, but some may be frustrated that
dollar/yen and cross/yen hadn't risen further.
The dollar dipped to a five-month low of 91.73 yen in July
and its rise stalled at 94.46 this week -- right around a 38.2
percent Fibonacci retracement of the dollar's fall from its high
in June of 98.90 yen down to the five-month trough.
It hit a six-week low at 79.131 against the basket of six
currencies <.DXY> on Thursday, pressured by bank earnings and an
headline improvement in U.S. weekly jobless claims, but rose 0.2
percent on Friday to 79.370.
SHARES AND BANKS
Currency markets have been watching stock markets closely in
the past few months as a barometer of investor confidence and
with earnings season underway, the next test will be reports
later on Friday from Citigroup <C.N> and Bank of America <BAC.N>.
Better-than-expected quarterly earnings from Goldman Sachs
<GS.N> and Intel <INTC.O> earlier in the week helped boost share
markets and lifted hopes about an economic recovery.
Still, JPMorgan <JPM.N> reported a surge in consumer credit
losses, showing a pullout from recession still has a long way to
go, and Citigroup and Bank of America were expected to post
relatively weaker performances, discouraging risk trades, one
trader said. []
"Unlike the Goldman Sachs results no one is talking about
them feverishly," noted Sue Trinh, senior currency strategist at
RBC Capital Markets in Sydney.
There was some focus on new Japanese investment trusts
featuring overseas investment being launched on Friday.
Eight new mutual funds that will invest in overseas assets
attracted a total of 23.9 billion yen ($255 million), according
to data compiled by Reuters.
Daiwa SB Investments is launching six that will target
emerging market bonds, with investors having the option of taking
currency risk in the Australian dollar, Brazilian real, New
Zealand dollar, South African rand, and Turkish lira.
Those six funds gained 11.4 billion yen, while a Daiwa Asset
Management mutual fund that will invest in equities in Japan and
emerging countries attracted 12.5 billion yen.
A trader for a Japanese brokerage house said such amounts
were too small to have much impact on the yen, especially since
some of the flows were unlikely to appear during Asian trading
hours.
(Additional reporting by Masayuki Kitano; Editing by Chris
Gallagher)
