* Dollar rises vs yen as risk appetite rises
* Firmer global stocks, higher commodities help dollar
* NZ dollar jumps vs dollar, yen
(Recasts, adds comment, updates prices; changes byline)
By Gertrude Chavez-Dreyfuss
NEW YORK, March 26 (Reuters) - The dollar and euro advanced
against the yen on Thursday, as investors grew more comfortable
buying risky assets such as stocks and commodities, dampening
the Japanese currency's safe-haven appeal.
Sharp gains on wall Street led by consumer shares along
with the surge in oil, gold, and other base metals have offset
persistent concerns about the viability of the U.S. banking
system. The increase in risk appetite has also triggered gains
in commodity currencies such as the Australian and New Zealand
dollars.
"There's a little bit of risk appetite in the market today
because we have seen U.S. stocks gain and commodities rise. So
that's why we're seeing gains in the dollar and euro versus the
yen," said Adam Fazio, senior currency strategist, at CIBC
World Markets in New York.
A further indication of risk appetite, he said, was the
steep rise in Toronto's main stock index <>, a
resource-based market, gaining in line with firmer commodities
amid a view that demand may be starting to pick up.
In early afternoon trading, the dollar rose 1.0 percent
against the yen to 98.53 yen <JPY=> while the euro rose 0.7
percent to 133.42 yen <EURJPY=>.
The yen along with the dollar have been a refuge for
investors in times of financial distress, rising as traders
unwind risky bets in stocks and oil financed in both
currencies' low rates.
The euro <EUR=> slipped 0.3 percent against the dollar to
$1.3538, after going as low as $1.3522. The single euro zone
currency has pulled back from highs on Wednesday that resulted
from U.S. Treasury Secretary Timothy Geithner's comment about
being open to expanding the use of the International Monetary
Fund's Special Drawing Rights.
Geithner spoke again on Thursday before the House Financial
Services Committee on financial regulation reform, but his
remarks had little impact on the foreign exchange market. For
his remarks, click on [].
Sterling fell 0.8 percent against the dollar to $1.4444,
also pressured by data showing UK retail sales were much weaker
than expected.
The New Zealand dollar surged to a 10-week high against the
dollar at US$0.5801 <NZD=> and touched more than nearly a
four-month peak of 57.09 yen <NZDJPY=R>, according to Reuters
data, as NZ government debt yields surged in a sign investors
were reining in expectations for lower rates. The Kiwi dollar
last traded at NZ$0.5754, up 1.7 percent.
New Zealand's cash rate stands at 3 percent and the central
bank has signaled it does not expect to reduce rates much
further.
The Australian dollar also rose versus the greenback to
US$0.7015 <AUD=>, up 0.7 percent on the day.
(Additional reporting by Nick Olivari)
(Editing by Theodore d'Afflisio)
