Yen stuck near 5-week low on yield, Aussie drops

TOKYO, Apr 4 (Reuters) The yen hovered near a five-week low against the dollar and the euro on Wednesday as investors continued to sell the low-yielding Japanese currency for higher-yielding ones.

But the high-yielding Australian dollar plunged broadly, pulling further away from a 10-year peak against the dollar and the yen after the Reserve Bank of Australia left rates at 6.25 percent, surprising investors who had been expecting a rate lift.

Stability in global stock markets whetted investors' appetites for riskier trades, which was helping to revive demand for strategies like the carry trade, where low-yielding currencies are used to buy higher-yielding currencies and assets.

''Stock markets have recovered, making investors feel more confident about taking on a bit more risk and so they are selling the yen,'' said Nobuo Ibaraki, foreign exchange manager at Nomura Trust and Banking.

Market participants said that Japanese investors including trust banks and investment trusts were dumping the local currency as the new financial year gets underway this week.

The Australian dollar tumbled more than 0.7 percent against its U.S. counterpart to TOKYO, Apr 4 (Reuters) The yen hovered near a five-week low against the dollar and the euro on Wednesday as investors continued to sell the low-yielding Japanese currency for higher-yielding ones.

But the high-yielding Australian dollar plunged broadly, pulling further away from a 10-year peak against the dollar and the yen after the Reserve Bank of Australia left rates at 6.25 percent, surprising investors who had been expecting a rate lift.

Stability in global stock markets whetted investors' appetites for riskier trades, which was helping to revive demand for strategies like the carry trade, where low-yielding currencies are used to buy higher-yielding currencies and assets.

''Stock markets have recovered, making investors feel more confident about taking on a bit more risk and so they are selling the yen,'' said Nobuo Ibaraki, foreign exchange manager at Nomura Trust and Banking.

Market participants said that Japanese investors including trust banks and investment trusts were dumping the local currency as the new financial year gets underway this week.

The Australian dollar tumbled more than 0.7 percent against its U.S. counterpart to $0.8064 backing off $0.8181 hit on Monday for the first time in a decade.

It dropped nearly 0.9 percent against the yen to around 95.85 yen leaving it nearly one yen below a 10-year high hit in the previous session.

The dollar stood at 118.90 yen in early trading, near a five-week high around 119 yen on Tuesday.

The euro was at 158.35 yen down 0.15 percent on the day but hovering within reach of around 158.85 yen touched on Tuesday for the first time since late February.

Market participants awaited a speech by Bank of Japan Deputy Governor Toshiro Muto later on Wednesday, although few expected his comments to have much impact on the market.

Muto will speak after the central bank's quarterly tankan business survey on Monday showed that Japanese corporate sentiment worsened for the first time in a year.

Reuters SBA VP0538 .8064 backing off TOKYO, Apr 4 (Reuters) The yen hovered near a five-week low against the dollar and the euro on Wednesday as investors continued to sell the low-yielding Japanese currency for higher-yielding ones.

But the high-yielding Australian dollar plunged broadly, pulling further away from a 10-year peak against the dollar and the yen after the Reserve Bank of Australia left rates at 6.25 percent, surprising investors who had been expecting a rate lift.

Stability in global stock markets whetted investors' appetites for riskier trades, which was helping to revive demand for strategies like the carry trade, where low-yielding currencies are used to buy higher-yielding currencies and assets.

''Stock markets have recovered, making investors feel more confident about taking on a bit more risk and so they are selling the yen,'' said Nobuo Ibaraki, foreign exchange manager at Nomura Trust and Banking.

Market participants said that Japanese investors including trust banks and investment trusts were dumping the local currency as the new financial year gets underway this week.

The Australian dollar tumbled more than 0.7 percent against its U.S. counterpart to $0.8064 backing off $0.8181 hit on Monday for the first time in a decade.

It dropped nearly 0.9 percent against the yen to around 95.85 yen leaving it nearly one yen below a 10-year high hit in the previous session.

The dollar stood at 118.90 yen in early trading, near a five-week high around 119 yen on Tuesday.

The euro was at 158.35 yen down 0.15 percent on the day but hovering within reach of around 158.85 yen touched on Tuesday for the first time since late February.

Market participants awaited a speech by Bank of Japan Deputy Governor Toshiro Muto later on Wednesday, although few expected his comments to have much impact on the market.

Muto will speak after the central bank's quarterly tankan business survey on Monday showed that Japanese corporate sentiment worsened for the first time in a year.

Reuters SBA VP0538 .8181 hit on Monday for the first time in a decade.

It dropped nearly 0.9 percent against the yen to around 95.85 yen leaving it nearly one yen below a 10-year high hit in the previous session.

The dollar stood at 118.90 yen in early trading, near a five-week high around 119 yen on Tuesday.

The euro was at 158.35 yen down 0.15 percent on the day but hovering within reach of around 158.85 yen touched on Tuesday for the first time since late February.

Market participants awaited a speech by Bank of Japan Deputy Governor Toshiro Muto later on Wednesday, although few expected his comments to have much impact on the market.

Muto will speak after the central bank's quarterly tankan business survey on Monday showed that Japanese corporate sentiment worsened for the first time in a year.

Reuters SBA VP0538