FOREX-Yen sell-off pauses after fresh quake; euro dips

* Yen off lows against euro, Australian dollar

* Investors trim short yen positions after new quake

* Euro slips, options expiry at $1.4450 seen influencing mkt

(adds quote, updates prices)

By Anirban Nag

LONDON, April 11 (Reuters) – The yen was off an 11-month low
against the euro and a 2-1/2 year trough versus the Australian
dollar on Monday, as another earthquake in Japan led some
investors to pare bearish bets against the country’s currency.

Traders said speculator positioning and some technical
indicators suggested that rallies in the euro and the Australian
dollar against the yen could pause in the short run with the
latest in a series of quakes being used by some to book profits.

With investors wary of taking on more risk, the euro also
dipped versus the dollar, staying below Friday’s 15-month high
of $1.4489. Traders said an options expiry at $1.4450 was likely
to influence price action, keeping it close to that level.

“(The latest Japan earthquake) has put a cap on the risk-on
trade we saw earlier in the session. Equity futures are off
their highs and cross/yen positions are being pared back,” said
Jeremy Stretch, head of currency strategy at CIBC World Markets.

The euro was down 0.25 percent at 122.40 yen (EURJPY=: Quote, Profile, Research), well
below its highest since May 2010 of 123.33 yen hit earlier on
trading platform EBS. The Australian dollar was down at 89.32
yen (AUDJPY=R: Quote, Profile, Research), having scaled a high of 90.04 yen earlier, its
strongest since September 2008.

A fresh strong aftershock hit Japan on Monday, while the
evacuation zone around its crippled nuclear plant was expanded
because of high levels of accumulated radiation. [ID:nL3E7FA058]

Against the dollar, the euro (EUR=: Quote, Profile, Research) was down 0.2 percent at
$1.4451. Some traders cited influence from the 21-hour moving
average around $1.4460.

But the euro was expected to stay supported by interest rate
differentials after last week’s 25 basis point hike by the
European Central Bank.

“The ECB hike and subsequent press conference did not bring
many surprises, but the sustained upward pressure on EUR/USD
suggests that net long positions may have been built further
since,” Danske Bank said in a note.

A number of Asian central banks were also said to have
intervened to prevent their currencies from rising, and traders
expected they may recycle those proceeds into the euro.

SHORT YEN POSITIONS RIPE FOR PULLBACK

Data from the Commodity and Futures Trading Commission
(CFTC) showed speculators went net short on the yen for the
first time in six weeks and by the biggest margin since May 2010
at a net 43,231 contracts in the week to April 5. [IMM/FX]

Technical indicators such as the 14-day relative strength
index and slow stochastics also suggested that the euro and
Australian dollar are in overbought territory against the yen,
pointing to the possibility of a near-term pull-back.

Commerzbank technical analyst Karen Jones said near-term
support for euro/yen lay around the 121.55/60 yen area, the lows
hit in late February 2010, adding short yen positions could see
some more profit taking in the short run.

She saw near-term support for the Australian dollar at 86.40
yen, the 23.6 percent retracement of its recent rally from a low
of 75.05 on March 17 to a high of above 90 on Monday.

The yen has fallen sharply in the wake of joint yen-selling
intervention by the Group of Seven nations in March, and on
expectations the Bank of Japan will lag other central banks in
raising interest rates.

The dollar was last steady at 84.68 (JPY=: Quote, Profile, Research), having hit the
day’s low around 84.55 yen soon after news of the fresh tremors.

Positioning in the Australian dollar also looked stretched,
with CFTC data revealing currency speculators held record long
positions in the Aussie dollar in the week to April 5.

The Australian dollar (AUD=D4: Quote, Profile, Research) was down 0.1 percent at
$1.0546, with one trader reporting selling by Asian corporate
names. It remained close to Friday’s 29-year high of $1.0585.

(Additional reporting by Jessica Mortimer; Editing by John
Stonestreet)

FOREX-Yen sell-off pauses after fresh quake; euro dips