* Euro retreats after Ireland puts price on bank
* Dollar/yen falls on Japan exporters and stops
* Euro/yen extends drop on stop-loss selling
* But intervention risk keeps dollar underpinned
By Charlotte Cooper and Masayuki Kitano
TOKYO, Sept 30 (Reuters) - The euro extended its losses
against the dollar and yen on Thursday after Ireland's central
bank put the price of bailing out Anglo Irish Bank at 34 billion
euros ($46 billion).
The euro initially held steady against the dollar after the
announcement but then came under pressure. The euro also dropped
against the yen, with its losses gaining steam after triggering
stop-loss offers below 113.50 yen, traders said.
The yen rose broadly on the last day of Japan's fiscal
half-year. Traders cited factors such as sporadic dollar selling
against the yen by Japanese exporters, stop-loss selling, and
dollar selling by hedge funds.
The euro's retreat lent support to the dollar, which hit a
five-month low on the euro and an eight-month low against a
basket of currencies <.DXY> earlier this week, hobbled by
speculation of more quantitative easing by the Federal Reserve.
The euro fell 0.4 percent to $1.3586 <EUR=>, having pulled
back from a five-month high against the dollar of $1.3647 hit on
trading platform EBS the previous day.
The euro slid 0.8 percent against the yen to 113.23 yen
<EURJPY=R>.
The euro seemed to take in stride news that Moody's had
downgraded Spain's local and foreign currency government bond
ratings by one notch to Aa1. []
The dollar fell 0.4 percent versus the yen to 83.43 yen
<JPY=>, edging closer to a 15-year low of 82.87 yen hit on
trading platform EBS earlier this month.
Ireland's central bank has put a 34 billion euro price on
bailing out stricken Anglo Irish Bank [] under a worst
case scenario and said Allied Irish Banks <ALBK.I> needs to raise
an additional 3 billion euros by the end of the year.
[]
EYES ON JAPANESE AUTHORITIES
The dollar remained supported by nervousness that Japanese
authorities might swoop in as they did on Sept. 15, when the Bank
of Japan carried out yen-selling intervention for the first time
in six years.
"We're in the intervention risk zone because the BOJ were
intervening in and around these levels when they first came into
the market," said Sue Trinh, a senior currency strategist at RBC
in Hong Kong.
Traders said intervention wariness would rise if the dollar
fell below 83.00.
"The current levels are a bit in-between, but I think they
may step in if the dollar breaks 83.50 and then drops to the
upper half of the 82-83 yen range," said a trader for a Japanese
bank, adding that intervention might be effective at this stage,
since cross/yen pairs were holding up relatively well.
But gauging the intervention trigger point was tricky and
some said it might be hard for Japan to intervene at current
levels as the latest moves came from dollar weakness rather than
yen strength.
Japanese Economics Minister Banri Kaieda was quoted as saying
this week that intervention was a temporary measure and the
government did not wish to "skew" the market.
The market is also waiting to see if the Bank of Japan takes
further easing steps to support the economy and counter the
impact of the rising yen at its policy meeting next Monday and
Tuesday.
Hedge fund adviser Medley Global Advisors said in a report on
Wednesday obtained by Reuters that the BOJ was preparing to ease
again. In addition, an unexpected fall in industrial output on
Thursday boosted the chances of more easing, with possible
options seen as extending a cheap fund-supply. []
(Editing by Michael Watson)
