* Yen and dollar rebound after sharp fall
* Stocks rise seen as temporary, investors return to safety
* Weekend G20 meeting expected to provide little direction
By Kaori Kaneko
TOKYO, Nov 14 (Reuters) - The yen edged up against the dollar
and the euro on Friday after a sharp fall the previous day, as
investors tip-toed back to the perceived safety of the Japanese
currency amid nagging concerns about the global credit crisis.
Asian stock markets rose, tracking sharp gains on Wall
Street, which had initially encouraged investors to return to
riskier trades, triggering a steep drop in the yen and the
dollar.
But caution set in as the market turned its attention to this
weekend's summit of the Group of 20 industrialised and emerging
economies, traders said.
The G20 will meet in Washington to discuss steps to address
the financial crisis, but traders do not expect the outcome of
the meeting to provide much guidance to a market steered by
deeper economic concerns.
The dollar rebounded versus the euro, making up for some of
the previous day's losses, with investors eyeing euro zone growth
data for the third quarter. The data, due at 1000 GMT, is
expected to confirm the euro zone is in recession.
"The anxiety caused by the financial market turmoil has not
disappeared from the market's overall tone. So demand for the
dollar and the yen driven by flight-to-safety will likely
remain," said Yousuke Hosokawa, senior manager at Chuo Mitsui
Trust and Banking.
"The market just can't brush away its worries about issues
such as how large the losses by U.S. financial corporations will
be and whether the $700 billion U.S bailout plan will suffice,"
he said.
The dollar fell 0.6 percent to 97.10 yen <JPY=> after having
jumped as high as 98.30 yen on Thursday from the lows below 95
yen touched earlier during that day.
Traders said real demand for the yen from exporters rose when
the Japanese currency fell sharply the previous day.
The euro dipped 0.9 percent to 123.62 yen on trading platform
EBS <EURJPY=EBS>. It soared about 8 yen, or 7 percent from a
2-week low below 118 yen to near 126 yen on Thursday.
The Nikkei share average trimmed earlier gains to rise 2.7
percent <> on Friday and failed to dent the yen as it did
not fully ease risk aversion, traders said.
"The currency market's performance reflects investors' doubt
over whether the rapid gains on Wall Street are sustainable. It
is difficult to take a bearish view on the dollar and the yen,"
said Nobuaki Kubo, vice president at BBH Investment Services.
The market is expected to grow more risk-averse if the euro
zone third-quarter gross domestic product deteriorates as
expected, traders said.
Euro zone GDP for the quarter is seen contracting 0.2
percent, bringing the annual rate of growth down to 0.7
percent.[]
On Thursday, data showed German GDP contracted by 0.5 percent
in the third quarter, putting Europe's biggest economy into
recession for the first time in five years [].
The single European currency edged down 0.1 percent to
$1.2755 <EUR=>, but stayed above a two-week low of $1.2388 hit
the previous day.
(Additional reporting by Shinichi Saoshiro; editing by Sophie
Hardach)
