Euro hits new peak vs yen, kiwi dips on RBNZ sales

TOKYO, June 18 (Reuters) The euro scaled a record peak against the yen on Monday on expectations for the Bank of Japan to raise interest rates only gradually, while the New Zealand dollar retreated on fresh central bank intervention.

The euro extended its gains to hit a record high against the low-yielding yen for the second straight session, getting a boost following Friday's remarks by BOJ Governor Toshihiko Fukui that all but doused fears of a rate rise in July.

The yen was also on the back foot after U.S. share prices rallied on Friday as investors took comfort from data showing a tamer-than-expected gain in U.S. core consumer prices.

''The CPI dispelled the market's fears as did Fukui. Such factors are crying out for yen-selling,'' said a trader at a major Japanese trading house.

The euro edged up to 165.33 yen as of 0009 GMT, hovering near a record high hit earlier on Monday. The euro earlier rose as high as 165.38 yen on electronic trading platform EBS.

Against the dollar, the euro was little changed at $1.3388 holding on to its gains from Friday when it rose 0.5 percent.

The dollar was steady at 123.42 yen holding near a 4-{ year high of 123.66 yen hit on EBS on Friday.

The New Zealand dollar slipped to $0.7528 from around $0.7550 in late U.S. trading on Friday, having retreated after New Zealand's central bank intervened on Monday for the second time in a week.

A spokeswoman at the Reserve Bank of New Zealand declined to comment on whether it had intervened on Monday, but market participants said the central bank had sold New Zealand dollars.

A Reuters poll on Friday showed that a majority of market players expect the BOJ to raise overnight interest rates in August, while half forecast a subsequent rate rise will occur in January or February of 2008.

A survey of 60 traders and analysts in Tokyo's currency and bond markets found that 36 see the BOJ's next interest rate rise to 0.75 percent from 0.5 percent in August. Only four expected a July rate rise. INT] Reuters KN SBA VP0600