Yen near all-time low vs euro, dogged by low yield

TOKYO, June 20 (Reuters) The yen hovered near an all-time low against the euro and a 4-1/2-year low versus the dollar on Wednesday as investors felt confident putting on carry trades to take advantage of the low-yielding Japanese currency.

Signs of a robust global economy, buoyant stock markets and renewed calm after a sell-off in major bond markets have prompted investors to borrow funds in currencies such as the yen to fund purchases of higher-yielding currencies such as the Australian and New Zealand dollars.

The Australian dollar held near a 16-year peak against the yen hit the previous session, while the New Zealand dollar has shaken off attempts by the country's central bank to weaken it and stands near a 20-year peak against the yen.

Currency strategists at RBC Capital Markets said in a note to clients that the New Zealand dollar has moved back into ''intervention range'' and the Reserve Bank of New Zealand should be watched closely.

The dollar was near 123.35 yen little changed from late U.S.

trade and just off a peak of 123.76 yen struck earlier in the week -- the highest since December 2002.

The euro drifted sideways at 165.60 yen near the all-time high of 166.12 yen hit the previous session.

The single currency was flat at $1.3427 having rebounded from an 11-week low of $1.3264 touched last week.

The New Zealand dollar changed hands at $0.7585 near a 22-year peak of $0.7640 hit earlier in the month and close to the levels when the RBNZ first confirmed it had intervened to sell the currency last week.

The minutes of the Bank of Japan's May meeting released on Wednesday showed board members felt there was considerable uncertainty about the outlook for consumer prices.

Since that meeting, BOJ Governor Toshihiko Fukui has said the central bank could raise rates even if core consumer prices are still falling as long as the central bank expected inflation to pick up, stoking expectations for a credit tightening in August.

The yen has slid since Fukui said last Friday the BOJ w has slipped versus the euro in the past three sessions as the rebound in Treasuries from their sharp sell-off has pulled benchmark U.S. yields down from a five-year high, which had given the U.S. currency a boost.

Data showing U.S. core inflation slowing to its weakest pace in 14 months in May and sentiment at home builders falling to a 16-year low this month reinforced expectations the Federal Reserve would likely keep rates steady at 5.25 percent.

REUTERS KN SBA BST0645